* King & Spalding Increases New York Office Space by 30 Percent* Sandler O'Neill Names Six New Principals

* Large Companies with Insolvent Balance Sheets

*********

ADELPHIA COMMS: Discloses Asset Sales Totaling $274,000-------------------------------------------------------Pursuant to the Excess Assets Sale Procedures approved by the U.S.Bankruptcy Court for the Southern District of New York, AdelphiaCommunications Corporation and its debtor-affiliates inform JudgeGerber that they will sell these properties for at least $274,000plus $6,900 worth of future services:

1. Property: The former Lewis estate located at Mill Street, in Coudersport, Pennsylvania

* Storage of the Debtors' equipment for two months at $10 per pallet, totaling $1,700;

* Payment of freight charges to move 15 pallets of the Debtors' materials, a service worth around $400; and

* Labor services valued at $4,800

Deposit: None

Appraised Value: No appraisal on the property was conducted

Headquartered in Coudersport, Pennsylvania, AdelphiaCommunications Corporation (OTC: ADELQ) is the fifth-largest cabletelevision company in the country. Adelphia serves customers in30 states and Puerto Rico, and offers analog and digital videoservices, high-speed Internet access and other advanced servicesover its broadband networks. The Company and its more than200 affiliates filed for Chapter 11 protection in the SouthernDistrict of New York on June 25, 2002. Those cases are jointlyadministered under case number 02-41729. Willkie Farr& Gallagher represents the ACOM Debtors. (Adelphia BankruptcyNews, Issue No. 77; Bankruptcy Creditors' Service, Inc.,215/945-7000)

AIRGAS INC: Refinances Credit Facility with $450 Million Loan-------------------------------------------------------------Airgas, Inc. (NYSE:ARG) has amended and restated its senior creditfacility with a syndicate of banks. The five-year $450 millionsenior unsecured credit facility, consists of a US$308 million andC$50 million (the US dollar equivalent of $42 million) revolvingcredit line and a $100 million term loan. The Credit Agreementsupersedes the credit agreement dated July 30, 2001, as amended,which would have matured in July 2006 and permitted the company toborrow up to the equivalent of $463 million. The company'sinitial borrowings under the Credit Agreement total $299 million.

The current borrowing rate is LIBOR plus 95 basis points, downfrom LIBOR plus 200 basis points under the 2001 Agreement.Additionally, the covenants under the new Credit Agreement providethe Company with more flexibility to complete acquisitions andmake restricted payments. The Company expects to file the CreditAgreement as an Exhibit to its Form 10-Q for the period endedDec. 31, 2004.

"Last November, we said we were looking to refinance our creditfacility and the savings have come in as expected," said RogerMillay, senior vice president and chief financial officer."Additionally, we have increased our flexibility to take actionsthat maximize shareholder value. Our lending group's recognitionof the sustainability of our cash flows and the Company's strongperformance since closing the 2001 Agreement contributed to thissuccessful transaction."

About Airgas, Inc.

Airgas, Inc. (NYSE:ARG) -- http://www.airgas.com/-- is the largest U.S. distributor of industrial, medical and specialtygases, welding, safety and related products. Its integratednetwork of about 900 locations includes branches, retail stores,gas fill plants, specialty gas labs, production facilities anddistribution centers. Airgas also distributes its products andservices through eBusiness, catalog and telesales channels. Itsnational scale and strong local presence offer a competitive edgeto its diversified customer base.

* * *

As reported in the Troubled Company Reporter on Nov. 8, 2004,Standard & Poor's Ratings Services raised its ratings on AirgasInc. The corporate credit rating was raised to 'BB+' from 'BB'.The outlook is stable on this Radnor, Pennsylvania-basedindustrial gas distributor.

The upgrade reflects the likelihood that credit quality will besustained at improved levels, despite periodic moderate-sizeacquisitions.

"The ratings on American Summit were raised to reflect itsposition within the group in addition to its extremely strongcapitalization and earnings on a stand-alone basis," said Standard& Poor's credit analyst Terence Tan.

Ratings with a 'pi' subscript are based on an analysis of aninsurer's published financial information and additionalinformation in the public domain. They do not reflect in-depthmeetings with an insurer's management and are therefore based onless comprehensive information than ratings without a 'pi'subscript.

Ratings with a 'pi' subscript are reviewed annually based on a newyear's financial statements, but may be reviewed on an interimbasis if a major event that may affect the insurer's financialsecurity occurs. Ratings with a 'pi' subscript are not subject topotential CreditWatch listings.

AMERICAN TOWER: S&P Places Ratings on CreditWatch Positive----------------------------------------------------------Standard & Poor's Ratings Services placed its ratings on Boston,Massachusetts-based wireless tower operator American TowerCorporation, including the 'B-' corporate credit rating, andrelated subsidiaries on CreditWatch with positive implications.At Sept. 30, 2004, the company had $3.2 billion of total debtoutstanding.

"The CreditWatch listing reflects the expectation that the companywill continue to grow its tower co-locations and associated toweroperating cash flows over the next several years," explainedStandard & Poor's credit analyst Catherine Cosentino. "While suchgrowth provides the potential for meaningful debt reduction, a keyrating determinant will be the company's financial policy.

Accordingly, Standard & Poor's will discuss with management theiracquisition plans, as well as possible stock repurchases in orderto resolve the CreditWatch listing."

American Tower benefits from the good fundamentals of the towerleasing business. U.S. wireless penetration of around 60% trailsthat of a number of European and Asian countries and, combinedwith an aggressive wireless pricing environment, suggests furtherwireless growth, which should translate into solid demand fortower space.

Towers are also relatively immune to technology risk. With goodoperating leverage accruing from a high fixed-cost component,American Tower should be able to improve its consolidated EBITDAmargin to better than 60%, from about 56% (adjusted for netinterest income from TV Azteca) in third-quarter 2004. With onlymodest capital-spending needs, a financial policy that limits bothdebt-financed acquisition activity and potential share repurchaseswould be supportive of a rating upgrade.

AMR HOLDCO: Moody's Assigns B2 Rating to Proposed Debt------------------------------------------------------Moody's Investors Service assigned first time ratings to theproposed debt of AMR HoldCo. Inc. and EmCare HoldCo. Inc. AMRHoldco., which is the larger of the two intermediate holdingcompanies, and EmCare are co-borrowers and co-issuers of alloutstanding debt. The proceeds from the proposed transactions,along with $220 million cash equity from Onex Partners LP will beused to effect the purchase of the two companies being sold byLaidlaw Inc. (B1 senior implied rating) for approximately$840 million including the assumption of approximately $13 millionof capital leases.

Concurrently, Moody's assigned a first time Speculative GradeLiquidity rating of SGL-2 reflecting the expectation of good nearterm liquidity. The ratings outlook is stable.

A list of the new ratings assigned:

-- $100 million Senior Secured Revolver, due 2011, rated B2

-- $350 million Senior Secured Term Loan B, due 2012, rated B2

-- $250 million Senior Subordinated Notes, due 2015, rated Caa1

-- Senior Implied Rating, rated B2

-- Senior Unsecured Issuer Rating, rated B3 (non-guaranteed exposure)

-- Speculative Grade Liquidity Rating, SGL-2

The rating outlook is stable.

The ratings are subject to the closing of the proposedacquisitions and the review of executed documentation.

The ratings reflect the risks associated with operating as astand-alone entity proforma for the separation from Laidlaw Inc.The ratings also reflect modest proforma free cash flow relativeto sizable debt, high financial leverage, increasing costs forproviding professional liability and other insurance coverage forits employees and contracted physicians, and high unionrepresentation for its ambulance service workforce.

AMR HoldCo., has a significant amount of uncollectible revenue asa result of providing charity care or unreimbursed care. Whilecharity care is inherent in the mandatory provision of ambulancetransport and emergency department care to all patients, includingthe uninsured, this care constrains the absolute level ofoperating cash flow from operations.

Factors mitigating these concerns include strong demand for thecompanies' services, leading market share in both the ambulancetransport and physician staffing for emergency departments, astable customer base, strong customer and geographicdiversification, an improving reimbursement environment, solidtechnology investments and risk management. Additional factorssupporting the rating include long-term relationships with keycustomers, a customer retention rate of over 90% in both ofbusinesses, a solid base of recurring revenue related to a highpercentage of revenue being under a contract, and a shift instrategy away from acquisitions to internal growth and costmanagement.

In spite of the listed credit strengths, Moody's is concerned withthe high level of capital expenditures needed to support theambulance business and the low margins for both the ambulancebusiness and emergency department business. Somewhat offsettingthis risk is the fact that the emergency department requires verylittle incremental capital to support future growth. Further,management, over the past few years, has rationalized thecompany's cost structure and expanded operating margins andincreased revenues at both divisions.

The stable ratings outlook anticipates that AMR HoldCo., willcontinue to expand operating margins through controlling costs,increasing volume from existing customers, and adding newcontracts in both businesses. Continued revenue growth andincreased margins should translate into higher free cash flowgeneration and debt reduction over time, improving debt coveragestatistics. There is a risk, however, that pricing pressure fromthird party payers and an increase in bad debt expense related tohigher uncompensated care could inhibit the company's recentprogress and prevent an improvement in the company's creditmetrics.

Proforma for the transaction, credit statistics are modest.During the intermediate term, adjusted free cash flow as apercentage of adjusted debt is expected to range in the mid toupper single digits. Financial leverage, as measured by the ratioof Debt/EBITDA, is expected to decline from close to 5 times toslightly over 3.5 times over the next two years. Similarly, thelevel of interest coverage (EBIT to interest) is expected toincrease to 2 times (EBITDA to proforma interest is expected tohover around 3 to 3.5 times).

The assignment of a B2 rating for the proposed secured creditfacility reflects the priority position in the capital structureand the expectation of asset coverage in a distressed scenario.In Moody's opinion, excess collateral coverage in a distressscenario would not likely be ample enough to support notchingabove the B2 senior implied rating. Further supporting the ratingis the fact that total committed bank facilities account forapproximately 65% of total pro-forma debt.

The credit facilities are secured by a first lien on the capitalstock of the co-borrowers and its subsidiaries, 60% of the capitalstock of controlled foreign operations, all inter-company debt ofthe borrowers and each guarantor, and all property and assets ofthe co-borrowers and each guarantor. There is a downstreamguarantee from the companies' ultimate parent holding company,EMSC, Inc., as well as an upstream guarantee from the co-borrowers, AMR HoldCo./EmCare HoldCo., and their subsidiaries.

The assignment of a Caa1 rating for the proposed seniorsubordinated notes considers the contractual subordination to anyexisting and future senior debt as well as the absence of anysecurity supporting this class of debt. The notes benefit fromthe same guarantee package as the credit facility.

The assignment of the SGL-2 speculative grade liquidity ratingreflects good liquidity as it is expected that internallygenerated cash flow will be sufficient to fund working capital,capital expenditures and debt service over the next twelve monthsending November 30, 2005. This rating also considers the modestamount of external committed funding the company is anticipated tohave upon the close of the $100 million revolving credit facility.

Given the Company's historical performance, Moody's expects thecompany to be in compliance with financial covenants under theproposed credit facility, and thus to maintain access to thiscommitted source. Moody's anticipates that the company will havea comfortable cushion relative to its projected performance.

The liquidity rating, however, is limited partly due to the modestlevel of free cash flow relative to required capital expenditures,and limited cash on hand. Any additional unexpected capitalexpenditures, particularly in the ambulance business, couldpressure free cash flow. Additionally, the SGL rating recognizesthe absence of an alternate source of liquidity, since all assetswill be encumbered under the credit agreement.

AMR HoldCo. and EmCare HoldCo., are leading providers of emergencymedical services. American Medical Response provides ambulancetransport services, including 911 transports, on a national basis.EmCare provides emergency department staffing and managementservices under 315 hospital contracts. For the twelve monthsended November 30, 2004, the pro-forma combined company generated$1.6 billion in revenue and $133.4 million in EBITDA.

ATA AIRLINES: Wants to Hire Ernst & Young as Auditor----------------------------------------------------ATA Airlines and its debtor-affiliates seek the United StatesBankruptcy Court for the Southern District of Indiana's authorityto employ Ernst & Young, LLP, as their independent auditor, nuncpro tunc to Oct. 26, 2004.

Ernst & Young has a vast amount of experience in providingaccounting, tax and financial advisory services in restructuringsand reorganizations, and enjoys an excellent reputation forservices it has rendered in other Chapter 11 cases on behalf ofdebtors and creditors throughout the United States.

Terry E. Hall, Esq., at Baker & Daniels, in Indianapolis,Indiana, asserts that the services of Ernst & Young are necessaryto enable the Debtors to maximize the value of their estates andreorganize successfully. Furthermore, Ernst & Young is wellqualified and able to represent the Debtors in a cost-effective,efficient and timely manner.

Ernst & Young will primarily audit the Debtors' consolidatedfinancial statements for the year ending December 31, 2004.

Ms. Hall tells the Bankruptcy Court that Ernst & Young performedcertain auditing services for the Debtors at the time of thePetition Date. The fees for the services -- $337,500 -- wereagreed prior to Petition Date. The Debtors have paid Ernst &Young the first installment of $50,000, leaving a balance of$287,500. The remaining balance will be paid for these services:

Description of Services Fees ----------------------- ---- A. Audit of the consolidated financial statements of ATA Holdings Corp., included its Annual Report on Form 10-K, as of and for the year ending December 31, 2004

Participate in all scheduled meetings of the audit committee of ATA Holdings

Attendance at ATA's Annual Meeting of Shareholders

Preparation of management letter $255,500

B. Annual audit of the ATA Airlines, Inc., Schedules of Passenger Facility Charges Collected, Withheld, Refunded/Exchanged, and Remitted for the year and each quarter during the year ending December 31, 2004 and related control report for the year ending December 31, 2004 13,500

C. Agreed-upon procedures related to INS User Fees for the year ending December 31, 2004 8,500

D. Attestation report on grant agreements with the Illinois Department of Commerce and Economic Opportunity 10,000

James A. Pease, a partner at Ernst & Young, assures Judge Lorchthat the firm does not represent any interest materially adverseto the Debtors' estate. Ernst & Young is a "disinterestedperson" as defined in Section 101(14) of the Bankruptcy Code.

However, Mr. Pease discloses that Ernst & Young may have in thepast or in the present transacted with certain entities, inmatters totally unrelated to the Debtors:

(1) Ernst & Young has sought the services of professional service firms involved in the Debtors' Chapter 11 cases, including:

(2) Ernst & Young is involved in a Revolving Credit Program with Citigroup, Wachovia/First Union and Bank of America;

(3) Ernst & Young has borrowed a long term debt from General Electric;

(4) Ernst & Young provides audit and tax services to AirTran Airways, Inc., and Southwest Airlines, possible purchasers of the Debtors' assets; and

(5) Ernst & Young is currently facing a suit from Gilbert F. Viets, an officer of the Debtors.

Ernst & Young will conduct an ongoing review of its files toensure that no conflicts or other disqualifying circumstancesexist or arise. If any new facts or circumstances arediscovered, Ernst & Young will supplement its disclosure to theBankruptcy Court.

Dispute Resolution Provisions

The Debtors and Ernst & Young have further agreed that:

(a) any controversy or claim with respect to, in connection with, arising out of, or in any way related to the Application or the services to be provided will be brought in the Bankruptcy Court or the District Court, if the District Court withdraws the reference;

(b) Ernst & Young and the Debtors, and any and all successors and assigns, consent to the jurisdiction and venue of the court as the sole and exclusive forum for the resolution of the claims, causes of actions or lawsuits;

(c) Ernst & Young and the Debtors and any and all successors and assigns waive trial by jury, the waiver being informed and freely made;

(d) if the Bankruptcy Court or the District Court upon withdrawal of the reference does not have or retain jurisdiction over the claims or controversies, Ernst & Young and the Debtors, and any and all successors and assigns, agree to submit first to non-binding mediation, and if mediation is not successful, then to binding arbitration, in accordance with dispute resolution procedures; and

(e) judgment on any arbitration award may be entered into any court having proper jurisdiction.

Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATAHoldings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) andone of the nation's largest low-fare carriers. ATA has one of theyoungest, most fuel-efficient fleets among the major carriers,featuring the new Boeing 737-800 and 757-300 aircraft. Theairline operates significant scheduled service from Chicago-Midway, Hawaii, Indianapolis, New York and San Francisco to over40 business and vacation destinations. Stock of parent company,ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. TheCompany and its debtor-affiliates filed for chapter 11 protectionon Oct. 26, 2004 (Bankr. S.D. Ind. Case No. 04-19866, 04-19868through 04-19874). Terry E. Hall, Esq., at Baker & Daniels,represents the Debtors in their restructuring efforts. When theDebtors filed for protection from their creditors, they listed$745,159,000 in total assets and $940,521,000 in total debts.(ATA Airlines Bankruptcy News, Issue No. 11; Bankruptcy Creditors'Service, Inc., 215/945-7000)

ATA AIRLINES: Committee Wants to Retain Compass as Advisor----------------------------------------------------------The Official Committee of Unsecured Creditors of ATA HoldingsCorp., et al., seeks the United States Bankruptcy Court for theSouthern District of Indiana's authority to retain CompassAdvisers, LLP, as its financial advisor and investment banker,effective as of November 4, 2004.

Lee P. Crockett, Co-Chairman of the Committee, relates that theCommittee selected Compass and its professionals due to the firm'sextensive experience and expertise in bankruptcy andreorganization proceedings, particularly with respect to advisingcommittees of creditors, as well as extensive experience in theairline and transportation sectors.

Scope of Services

As the financial advisor and investment banker to the Committee,Compass will:

(a) review and analyze ATA Airlines and its debtor-affiliates' business operations including historical financial results and future projections and assist the Committee in assessing the Debtors' business, operating and financial strategies;

(b) provide a financial valuation of the ongoing operations and assets of the Debtors;

(c) review and analyze the financial and economic rights and interests of the Debtors' various security holders and claimants;

(d) advise the Committee with respect to the strategic options available for achieving a plan of reorganization, a sale of the Debtors' assets, a sale or sales of the Debtors' businesses or any of the Debtors' operations;

(e) analyze and value securities and other assets proposed to be distributed to unsecured creditors or other classes of creditors or claimants under a plan of reorganization or various plans of reorganization proposals;

(f) assist the Committee in negotiating the terms of a plan of reorganization, including developing, evaluating, proposing and negotiating financial settlement proposals;

(g) in cooperation with the Committee's other professional advisors, assist and represent the Committee in negotiating a final plan of reorganization with the Debtors and other parties-in-interest;

(h) as may be necessary, act as the Committee's expert witness in the Bankruptcy Court with respect to the value of the Debtors' going concern or enterprise values, the value of securities or other assets to be distributed to creditors and others in connection with a plan of reorganization or a sales or sales, and other issues relating to a proposed plan or plans of reorganization or a sale or sales of the Debtors' assets; and

(i) render other financial advisory or investment banking services as may be agreed upon by Compass and the Committee.

Compensation

Pursuant to an Engagement Letter, Compass will be entitled toreceive, as administrative expenses from the general funds of theDebtors' estates, compensation for the services it will provide tothe Committee:

-- $125,000 for the period November 4 to 30, 2004; and

-- $125,000 for each full or partial calendar month commencing December 1, 2004.

Upon consummation of any Transaction, Compass will entitled toreceive an Incentive Fee based on these ranges of percentagerecoveries of the unsecured creditors' Total Consideration:

Compass will be indemnified and held harmless against any losses,claims, damages, or liabilities in connection with the engagement,except to the extent they arise as a result of any grossnegligence, intentional misconduct, or bad faith on the part ofCompass in the performance of its services.

Harvey L. Tepner, a partner at Compass, assures the Court thatCompass does not represent any of the Debtors' creditors, otherparties-in-interest, or their attorneys or accountants, in anymatter that is adverse to the interests of any of the Debtors.The firm is a "disinterested person" as defined in Section 101(14)of the Bankruptcy Code.

Mr. Tepner discloses that Compass currently advises John HancockMutual Funds, Well Fargo and Wilmington Trust Company in mattersunrelated to the Debtors. Mr. Tepner adds that Compass and itsprofessionals may have, in the past or present, engaged withcertain entities in matters totally unrelated to the Debtors'Chapter 11 cases, including:

Mr. Tepner relates that it is Compass' policy and intent to updateand expand its ongoing relationship search for additionalpotential parties-in-interest in an expedient manner. If any newrelevant facts or relationships are discovered or arise, Compasswill promptly file a supplemental affidavit pursuant to Rule2014(a) of the Federal Rules of Bankruptcy Procedure.

Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATAHoldings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) andone of the nation's largest low-fare carriers. ATA has one of theyoungest, most fuel-efficient fleets among the major carriers,featuring the new Boeing 737-800 and 757-300 aircraft. Theairline operates significant scheduled service from Chicago-Midway, Hawaii, Indianapolis, New York and San Francisco to over40 business and vacation destinations. Stock of parent company,ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. TheCompany and its debtor-affiliates filed for chapter 11 protectionon Oct. 26, 2004 (Bankr. S.D. Ind. Case No. 04-19866, 04-19868through 04-19874). Terry E. Hall, Esq., at Baker & Daniels,represents the Debtors in their restructuring efforts. When theDebtors filed for protection from their creditors, they listed$745,159,000 in total assets and $940,521,000 in total debts.(ATA Airlines Bankruptcy News, Issue No. 11; Bankruptcy Creditors'Service, Inc., 215/945-7000)

Mr. Viets first served as Executive Vice President and CFO of theCompany from June 2004 to October 2004 until he was appointedChief Restructuring Officer from October 2004 to January 2005. Heis a director of the Company and served as Chairman of the AuditCommittee from May 2003 to June 2004. He was also a clinicalprofessor in the Systems and Accounting Program of the KelleySchool of Business at Indiana University, Bloomington, Indiana.Mr. Viets, a Certified Public Accountant, was with Arthur AndersenLLP for 35 years before retiring in 2000. He graduated fromWashburn University of Topeka in Kansas. He has been active innumerous civic organizations and presently serves on the financecommittees of St. Vincent Hospital and Healthcare Center, Inc..and St. Vincent Health, both located in Indianapolis.

Other Management Changes

Sean G. Frick, named Vice President of Strategic Planning in 2004,will add duties as ATA's Chief Restructuring Officer and willcontinue to report to Viets. Mr. Frick, who joined ATA in 1997,had been Director of Strategic Planning.

Richard W. Meyer, Jr., has been promoted to Senior Vice Presidentof Employee Relations. Mr. Meyer, who joined ATA in 1989, hadbeen Vice President of Labor Relations. Mr. Meyer's new positioncombines the functions of human resources and labor relations forall of ATA's work groups.

Brian T. Hunt, Vice President and General Counsel, has beenpromoted to Senior Vice President and General Counsel. Mr. Hunt,who joined ATA in 1990, is also ATA's Corporate Secretary.

Wisty B. Malone, named Vice President and Controller in 2003, willnow assume additional responsibility as ATA's Treasurer. Mr.Malone, who joined ATA in 1995, had previously been Director ofFinancial Reporting.

Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATAHoldings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) andone of the nation's largest low-fare carriers. ATA has one of theyoungest, most fuel-efficient fleets among the major carriers,featuring the new Boeing 737-800 and 757-300 aircraft. Theairline operates significant scheduled service from Chicago-Midway, Hawaii, Indianapolis, New York and San Francisco to over40 business and vacation destinations. Stock of parent company,ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. TheCompany and its debtor-affiliates filed for chapter 11 protectionon Oct. 26, 2004 (Bankr. S.D. Ind. Case No. 04-19866, 04-19868through 04-19874). Terry E. Hall, Esq., at Baker & Daniels,represents the Debtors in their restructuring efforts. When theDebtors filed for protection from their creditors, they listed$745,159,000 in total assets and $940,521,000 in total debts.

BANK OF AMERICA: S&P Affirms Low-B Ratings on Pass-Thru Certs.--------------------------------------------------------------Standard & Poor's Ratings Services raised its ratings on 20classes of various RMBS pass-through certificates issued by Bankof America Mortgage Securities Inc., and Bank of America MortgageTrust. At the same time, ratings are affirmed on 163 classesfrom 11 RMBS transactions from both issuers.

The raised ratings reflect a significant increase in creditsupport percentages to the mezzanine and subordinate classes dueto the paydown of the transactions, combined with the shiftinginterest feature of the transactions and very low losses. Creditsupport for these transactions is provided by subordination.

The affirmations on the remaining classes reflect stable creditsupport percentages, no losses, and rapid prepayments.

As of January 2004, the pools have total delinquencies rangingfrom 0.00% (Bank of America Mortgage 2001-4 Trust group 2, Bank ofAmerica Mortgage 2002-10 Trust group 2, and Bank of AmericaMortgage Securities Inc. Series 2004-3 groups 3 and 4) to 23.84%(Bank of America Mortgage Securities Inc. Series 2002-G). Seriousdelinquencies have ranged from 0.00% to 10.53% (Bank of AmericaMortgage Securities Inc. series 2002-G). Cumulative losses forall of the pools have been nonexistent due to the nature of thecollateral. The lack of realized cumulative losses, combined withthe shifting-interest feature of the transactions, have causedcurrent credit support percentages to increase as a percentage ofthe pool balances.

Standard & Poor's also affirmed its 'B+' corporate credit ratingson BCP Crystal US Holdings and its Germany-based subsidiary,Celanese AG. In addition, Standard & Poor's affirmed its 'B+'corporate credit and senior unsecured debt ratings on AcetexCorporation, which is being acquired by Celanese Corporation, andrevised the outlook to positive from negative.

The outlook revision reflects the potential that improvingearnings, debt reduction, and Celanese Corporation's financialpolicies would enable debt leverage measures to graduallystrengthen to more-than-satisfactory levels within the next fewyears. The 'B+' and the '3' recovery rating indicate that lendersof the senior secured credit facilities can expect a meaningful(50%-80%) recovery of principal in the event of default.

"The ratings incorporate the planned $1 billion IPO of CelaneseCorporation (parent company of BCP), the $1.6 billion incrementalincrease in the senior credit facilities, as well as the pendingacquisitions of Acetex Corporation for $492 million and anemulsion polymer business for $208 million," said Standard &Poor's credit analyst Wesley E. Chinn. "The acquisitions willresult in a modest rise in the already aggressive debt load, sothe continuation of the earnings uptrend is essential to improveoverall credit quality," added Mr. Chinn.

BCP Crystal's credit quality already incorporates considerabledebt that resulted from borrowings in 2004 to fund the BlackstoneGroup's tender offer for the shares of Celanese--a transactionvalued at about $3.4 billion; and aggressive financial policies ofthe equity sponsors, as underscored by the two pending debt-financed acquisitions and dividend payouts. These weaknessesare only partially offset by the company's solid business profileas an integrated producer of diverse commodity and industrialchemicals, improving earnings, and the financial flexibilityresulting from its global asset base.

Significant product market shares and competitive cost structuressupport good positions in its major products, and a productportfolio that includes a balance of commodity, intermediate, andmore specialized industrial chemical products serving a wide rangeof end markets.

With annual pro forma revenues of about $6.0 billion, Celaneseranks among the larger and more diversified global chemicalbusinesses.

BEARINGPOINT INC: Names Joseph Corbett Chief Financial Officer--------------------------------------------------------------BearingPoint, Inc. (NYSE: BE), one of the world's largest businessconsulting and systems integration firms, named Joseph Corbett,former Executive Vice President and Chief Financial Officer ofIntelsat, Ltd., as its new Chief Financial Officer. Mr. Corbettjoins the company effective immediately and will be located at theCompany's global headquarters in Virginia.

Mr. Corbett, 45, will be responsible for BearingPoint's corporatefinance and accounting globally. He will also be a member ofBearingPoint's executive leadership team, which is responsible forthe strategic direction of the company.

Mr. Corbett comes to BearingPoint after nine years in a number ofleadership roles at Intelsat, where he served as Chief FinancialOfficer since 1998 and led all financial operations at the globalsatellite company, including its transition in 2001 to a privatecompany with customers in more than 200 countries. Mr. Corbettwas instrumental in helping improve the international satelliteoperator's financial position, including managing its initialaccess to U.S. debt capital markets and refinancing $2 billion ofIntelsat's bank and public debt.

A certified public accountant and longtime resident of theWashington, D.C., area, Mr. Corbett also previously held seniorpositions at McLean, Va.- based home builder NVR, Inc., and theWashington, D.C., offices of KPMG LLP, a global audit andaccounting firm. A 1982 graduate of George Washington University,Mr. Corbett is a member of the AICPA and the Greater WashingtonSociety of CPAs.

About the Company

BearingPoint, Inc. (NYSE: BE) -- http://www.BearingPoint.com/-- is one of the world's largest business consulting, systemsintegration and managed services firms serving Global 2000companies, medium-sized businesses, government agencies and otherorganizations. We provide business and technology strategy,systems design, architecture, applications implementation, networkinfrastructure, systems integration and managed services. Ourservice offerings are designed to help our clients generaterevenue, reduce costs and access the information necessary tooperate their business on a timely basis. Based in McLean, Va.,BearingPoint has been named by Fortune as one of America's MostAdmired Companies in the computer and data services sector.

* * *

As reported in the Troubled Company Reporter on Dec. 17, 2004,Standard & Poor's Ratings Services lowered its corporate creditand senior unsecured ratings on McLean, Virginia-basedBearingPoint, Inc., to `BB+' from `BBB-'.

At the same time, Standard & Poor's assigned a 'BB-' rating to thecompany's $325 million in Series A and Series B convertiblesubordinated notes due Dec. 14, 2024.

"The downgrade reflects currently weak profitability and cash flowmeasures in a very competitive operating environment," saidStandard & Poor's credit analyst Philip Schrank. The ratingsreflect a currently high-cost structure, improving but low marginsin relation to historical levels, and weakened cash flowprotection measures. Offsetting these factors, the companymaintains a good competitive position specifically in the PublicServices sector (representing more than half of revenues), strongclient relationships, and increased global scale.

BIOCAPITAL BIOTECH: Fund Terminated Following Complete Liquidation------------------------------------------------------------------BioCapital Investment Advisors Inc., the trustee of BioCapitalBiotechnology and Healthcare Fund, an open-end mutual fund trust,has completed the previously announced liquidation of the Fund.As part of the liquidation of the Fund, all managed assets of theFund were subject to an orderly liquidation and the net proceedsof this liquidation were distributed to the unitholders inproportion to the number of units they held in the Fund upon thedate of liquidation. The cash distribution took place on Dec. 13,2004. The closing financial statements of the Fund are beingprepared and will be transmitted to the unitholders of recordwithin the prescribed time period.

BioCapital Investment Advisors Inc. also disclosed that, followingthe liquidation of the Fund, the Custodian Agreement with RoyalTrust Company in respect of the Fund and the Management Agreementwith BioCapital Investment Advisors Inc. in respect of the Fund,were terminated. Upon transmission of its closing financialstatements, the Fund's existence will be formally terminated.

This extension of the Stay Termination Date was necessary due tofurther delays in the implementation of CSII's Amended Plan. Thedelays are principally the result of the difficulties encounteredin connection with the refinancing of the existing creditfacilities of CSII's subsidiary Cabovisao-Televisao por Cabo, S.A,which refinancing is a condition precedent to the implementationof the Amended Plan.

The Monitor and the Amended Plan Sponsor, Catalyst Fund LimitedPartnership I are continuing their efforts to complete therefinancing in order to allow for the timely implementation of theAmended Plan.

However, there can be no assurance that this condition precedentwill be satisfied and, accordingly, no assurance can be given thatthe Amended Plan will be successfully implemented or implementedon the terms and conditions of the Amended Plan.

As previously announced, the Amended Plan provides, among otherthings, for no distribution to be made to the existingshareholders. As a result, the currently outstanding shares ofCSII have no value under the Amended Plan.

The orders rendered under the CCAA in respect of CSII, theMonitor's reports and related materials at:

* advising Mr. Butler on the various legal issues which may arise; and

* appearing in Court on Mr. Butler's behalf.

Mr. Butler selected McEvoy Daniels because it has considerableexperience and is qualified to represent him in the TucsonDiocese's case.

McEvoy Daniels will be paid at its standard hourly rates andreimbursed for necessary costs and expenses. The professionalswithin the firm presently contemplated to primarily represent Mr.Butler and their hourly rates are:

Type of Business: The Debtor is a marketer and promoter aiming to boost the country's interest in soccer. The company has brought numerous European teams to play in the U.S. See http://www.championsworld.com/

-- $250 million original principal amount of its senior notes due 2012 and

-- $250 million original principal amount of its senior notes due 2015.

The senior notes will be offered to qualified institutional buyerspursuant to Rule 144A under the Securities Act of 1933, asamended, and outside the United States pursuant to Regulation S.The senior notes will rank equal in right of payment to all ofCoventry's existing and future senior debt, including its existing8.125% senior notes due 2012 and new credit facilities. Thesenior notes will be general unsecured obligations of Coventry.Coventry plans to use the net proceeds of the senior notesoffering, together with cash on hand and borrowings under its newcredit facilities, to fund the acquisition of First Health GroupCorp., including the repayment of First Health's existingoutstanding indebtedness. The closing of the offering isconditioned on the substantially concurrent closing of the FirstHealth acquisition.

The securities will not be registered under the Securities Act orany state securities laws and, unless so registered, may not beoffered or sold in the United States except pursuant to anexemption from the registration requirements of the Securities Actand applicable state laws.

First Health -- http://www.firsthealth.com/-- the premier national health-benefits services company, specializes inproviding large payors with integrated managed care solutions.First Health is a unique national managed care company serving thegroup health, workers' compensation and state agency markets.Using technology to enable service and managed care innovations,First Health sets the bar for industry performance.

This communication is not a solicitation of a proxy from anysecurity holder of First Health. Coventry and First Health fileda registration statement on Form S-4 with the SEC in connectionwith the merger. The Form S-4 contains a prospectus, a proxystatement and other documents for the stockholders' meeting ofFirst Health at which time the proposed transaction will beconsidered. The Form S-4, proxy statement and prospectus containimportant information about Coventry, First Health, the merger andrelated matters. Investors and stockholders should read the FormS-4, the proxy statement and prospectus and the other documentsfiled with the SEC in connection with the merger carefully beforethey make any decision with respect to the merger. The Form S-4,proxy statement and prospectus, and all other documents filed withthe SEC in connection with the merger are available free of chargeat the SEC's web site, http://www.sec.gov/

All documents filed with the SEC by Coventry in connection withthe merger are available to investors free of charge by writingto:

As reported in the Troubled Company Reporter on Dec. 9, 2004,Moody's Investors Service confirmed Coventry Health Care, Inc.'sratings (senior unsecured rating at Ba1) in conjunction with thecompany's planned acquisition of First Health Group Corp. Whilethe increased debt that Coventry is expected to issue with thistransaction is larger than what had been assumed in the ratings,the rating agency noted that Coventry has a credible plan to bringits financial leverage to a level consistent with the ratingwithin a short period. In addition, Moody's views the strategicopportunities presented by the acquisition as positive. However,Moody's noted that the acquisition poses both operational andintegration issues and as a result the outlook on the ratings hasbeen changed to negative.

The rating action concludes the review for possible downgrade thatwas initiated on October 18, 2004. The review was prompted by theannounced planned acquisition of First Health which raisedquestions with respect to management's tolerance for financialleverage, its appetite for future acquisitions and the company'snear term financial plans for de-leveraging.

The outlook is stable. As of Sept. 30, 2004, the company hadabout $1.9 billion of debt and $508 million of redeemablepreferred stock outstanding.

The previous CreditWatch listing cited the potential creditimprovement if substantially all after-tax proceeds of the $2billion sale of Crown Castle's U.K. operation were used to paydown debt. "The upgrade reflects the fact that Crown Castle didindeed apply the bulk of the U.K. sale proceeds to debtreduction," said Standard & Poor's credit analyst CatherineCosentino. "As a result, debt to EBITDA (including preferredstock and on a lease-adjusted basis) is expected to be in the high7x area for 2005, substantially down from 10.1x for 2003."

Despite the material improvement in leverage, Crown Castle'scredit profile continues to be constrained by a still fairlyaggressive financial profile, which overshadows the favorablecharacteristics of its tower business. The company's towerportfolio has good growth prospects, limited competitive risk, andstrong operating leverage. Tower-related spending by wirelesscarriers is expected to remain robust in the next few years due tocontinued growth in subscribers and minutes of use, and increasingemphasis by carriers on network quality.

Competitive risk is limited by such factors as long-term leasecontracts with carriers, real estate zoning, and lack of atechnology substitute. With mostly fixed costs and limitedmaintenance capital expenditures, the tower business has strongoperating leverage, as revenues from the combination ofcontractual rent escalation and additional lease-ups streamdirectly to EBITDA and free cash flow. All these factors enabledCrown Castle to grow revenues by about 8% year over year andmaintain strong EBITDA margins of 49% during the third quarter of2004.

The assets acquired by TGC included certain equipment,intellectual property and trademarks of DML. These assets areexpected to form the core of a new product R&D program which TGCwill begin implementing in early February 2005. This programinitially will be focused on a line of products aimed atmonitoring and controlling glucose on a continuous basis incritically ill patients in a hospital setting at the point-of-patient care. Initial product introduction is expected within 18-24 months, followed by continued improvements, enhancements andexpansion of the product line.

A significant research study on controlling glucose within tightparameters was published in November of 2001. As a result of thisand other studies, tight glycemic control protocols have changedpractice patterns in virtually all ICU settings around the world.At a recent lecture on this topic, at the Society of Critical CareMedicine Congress in February 2004, 80% of all attendees indicatedthat their hospital had instituted some form of tight glycemiccontrol. As one physician put it: "Glucose is the 12th vitalsign."

"Published clinical evidence, we believe, has conclusivelydemonstrated that maintaining patients within strict glycemiclimits (a clinical practice known as tight glycemic control, orTGC) can dramatically reduce mortality, risk of infection andother complications," said David B. Kaysen, President and CEO ofDiametrics. Mr. Kaysen went on to say, "We believe the most cost-effective way to achieve optimal glycemic control is by thecontinuous monitoring of glucose, a measurement modality that isnot currently available in intensive care units."

Mr. Kaysen also stated, "Our new focus as a company will be todevelop a product system that will effectively and accuratelymeasure glucose, on a continuous basis, in critically illhospitalized patients. We believe our product offering, whenintroduced to the market, will allow clinicians around the worldto maintain tight glycemic control in this patient population,which we believe represents a significant opportunity for ourcompany."

About the Company

Diametrics Medical makes blood- and tissue-analysis systems thatprovide immediate or continuous diagnostic results. Other productapplications are based on fiber-optic technology and include theNeurotrend, Paratrend 7, and Neotrend continuous-monitoringproducts that measure blood gases and temperature in neurosurgerypatients, critically ill adults, and newborn babies. DiametricsMedical markets its products to hospitals through distributorssuch as Codman & Shurtleff.

* * *

On June 9, 2004, KPMG LLP provided written notice to DiametricsMedical, Inc., that the Firm declines to stand for reappointmentand have resigned as auditors and principal accountants for theyear ended December 31, 2004. KPMG informed the Company that theclient-auditor relationship would cease upon completion of theauditor's review of the Company's consolidated financialstatements as of, and for, the three and six-month periods endedJune 30, 2004.

KPMG's audit reports on the consolidated financial statements ofDiametrics Medical, Inc. as of, and for, the years ended Dec. 31,2003, and 2002, note that the Company has suffered from recurringlosses and negative cash flows, raising substantial doubt aboutits ability to continue as a going concern.

Other than such qualification as to uncertainty as a goingconcern, the audit reports of KPMG LLP did not contain any adverseopinion or disclaimer of opinion, nor were they qualified ormodified as to audit scope or accounting principles.

The Company has conducted initial interviews with potentialsuccessors to KPMG LLP and expects to appoint new principalaccountants during the third quarter.

EARL BRICE: Robert F. Craig Approved as Bankruptcy Counsel---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nebraska gave EarlBrice Equipment, LLC, permission to employ Robert F. Craig, P.C.as its general bankruptcy counsel.

Robert F Craig will:

a) prepare pleadings and applications for the Debtor and conduct examinations incidental to its bankruptcy proceedings and the administration of its chapter 11 case;

b) advise the Debtor of its rights, duties and obligations as a debtor in possession in its chapter 11 case;

c) take all necessary actions in the preservation and administration of the Debtor's estate;

d) assist the Debtor in the analysis and pursuit of litigation related to its chapter 11 case; and

e) advise and assist the Debtor in the formulation of a plan of reorganization and disclosure statement and all related documents to the plan and disclosure statement.

Jenna B. Taub, Esq., a Member at Robert F. Craig, is the leadattorney for the Debtor's restructuring. Ms. Taub discloses thatthe Firm received a $15,000 retainer.

Robert F. Craig did not submit the hourly compensation rates ofits professionals performing services to Earl Brice when theDebtor filed its application to employ the Firm.

Robert F. Craig assures the Court that it does not represent anyinterest adverse to the Debtor or its estate.

EARL BRICE: Section 341(a) Meeting Slated for Jan. 28----------------------------------------------------- The U.S. Trustee for Region 13 will convene a meeting of EarlBrice Equipment, LLC's creditors at 9:30 a.m., on Jan. 28, 2005,at Roman L. Hruska Courthouse, 111 South 18th Plaza, U.S. TrusteeMeeting Room in Omaha, Nebraska 68102. This is the first meetingof creditors required under U.S.C. Sec. 341(a) in all bankruptcycases.

All creditors are invited, but not required, to attend. ThisMeeting of Creditors offers the one opportunity in a bankruptcyproceeding for creditors to question a responsible office of theDebtor under oath about the company's financial affairs andoperations that would be of interest to the general body ofcreditors.

EARTHMOVERS INC: Disclosure Statement Hearing Set for Feb. 22------------------------------------------------------------- The Honorable Janice Miller Karlin of the U.S. Bankruptcy Courtfor the District of Kansas will convene a hearing at 9:00 a.m., onFebruary 22, 2005, to consider the adequacy of the DisclosureStatement explaining the Plan of Reorganization filed byEarthmovers, Inc.

The Debtor filed its Disclosure Statement and Plan on January 4,2005.

The Plan provides for the sale of substantially all of theDebtor's assets. Pursuant to the Plan:

a) the Debtor's major secured creditor, Citizens State Bank will be paid the amount of its cash collateral from the proceeds of the net sale of the asset sale;

b) all debts incurred during its chapter 11 proceeding will be paid, including administration and liquidation costs; and

c) all priority creditors will be paid in full on a Pro Rata basis.

The Plan groups claims and interests into seven classes andprovides for these recoveries:

a) Class 1 impaired claims consisting of Administrative Claims will be paid in full upon the Plan's confirmation;

b) Class 2 impaired claims consisting of the Internal Revenue Services Priority Claims will be paid in full with a 5% interest rate on the first anniversary of the Plan's confirmation;

c) Class 3 impaired claims consisting of the Secured Claims of Robbie Oelschlager will be paid in full on or before the first anniversary of the Plan's confirmation;

d) Class 4 impaired claims consisting of the Secured Claims of Citizens State Bank of Maryville, Kansas will be paid in annual payments with an interest rate of 5% commencing on the first anniversary of the Plan's confirmation;

e) Class 5 impaired claims consisting of Unsecured Creditors' Claims will be paid in full in six annual installments in the amount of $18,439.10 each, beginning on the first anniversary of the Plan's confirmation;

f) Class 6 impaired claims of the Dell Computers Claims will be paid with the Debtor's assumption of the leases of several computers from Dell Computers as cure for any and all arrearages with Dell; and

g) Class 7 impaired claims consisting of the claims of Richard Terry Bailey and Ruth Bailey will not be paid under the Plan until all the claims of all other creditors are paid.

Full-text copies of the Disclosure Statement and Plan areavailable for a fee at:

Objections to the Disclosure Statement, if any, must be filed andserved on or before February 16, 2005.

Headquartered in Washington, Kansas, Earthmovers, Inc., --http://www.earthtrucks.com/-- specializes in the sales and service of medium to heavy trucks. The Company filed for chapter11 protection on September 2, 2004 (Bankr. D. Kan. Case No.04-42477). Charles T. Engel, Esq., and John T. Houston, Esq., atCosgrove Webb & Oman represent the Debtor in its restructuringefforts. When the Debtor filed for bankruptcy protection, itestimated assets of up to $10 million and debts of up to $10million.

The proceeds of the note offering along with contributed equity ofapproximately $21.6 million from Jeffries Capital Partners and$2.4 million from Edgen Corporation management will be used tofinance the acquisition of Edgen. Jeffries Capital and Edgenmanagement will contribute the $24 million investment to EdgenAcquisition Corporation, which will also be the original issuer ofthe secured notes. Immediately following the closing of theacquisition, Edgen Acquisition Corp. will be merged into Edgen.Post the transaction, Edgen will be owned 81% by Jeffries Capitaland 19% by Edgen management.

The B3 senior implied rating reflects the modest scale of EdgenCorp's operations, the uncertain long-term impact of its recentrestructuring and integration efforts, the inherent cyclicality ofthe energy and industrial markets that use Edgen's specializedcarbon and alloy pipe, and the potential for margin compressiongiven volatile steel prices and relatively slow-moving inventory.The rating also incorporates the increased leverage associatedwith the proposed transaction, relatively weak liquidity, minimaltangible asset coverage, and the likelihood of acquisitions.

The ratings are supported by the recent improvement in EdgenCorp's operating performance, which has been helped by steadilyincreasing prices, a shift to a higher value product mix, andreduced labor costs as well as the integration of its variousbusiness segments and the implementation of a new ERP/MISplatform.

Edgen Corp. is a distributor of third party manufactured pipe andpipe fittings and flanges to a variety of end users in the oil andgas, power generation, and process industries. From 1996 to 2002,Edgen completed seven acquisitions. None of the acquiredcompanies were integrated and each operated as a standalone entitywith its own CEO.

In March 2003, Edgen Corp. began a strategic restructuring tointegrate seven business segments into two, increase the sales mixtoward specialty products, install a new management ERP/MISplatform, and reduce its labor force by one-third, to 200employees from 300.

In 2004, Edgen Corp. began to realize substantial marginimprovement related to significantly higher commodity prices,improved product mix, and one-time benefits from lower costinventory reductions. Going forward, management believes its newbusiness model will result in gross margin improvement of 3% to 5%over historic levels on a sustainable basis. However, given thevery limited operating history under the new business model it isuncertain as to what is a true sustainable margin over the longerterm.

Management also installed a new ERP/MIS platform that should helpto better manage inventory levels and maintain consistent pricingthrough out the organization going forward. Prior to installingthis system there were significant selling price variances thatexisted between individual operating entities.

However, to help expedite the migration of four legacy systemsinto a new single ERP platform, management used a hard start dateand did not integrate the old system. As a result, access tohistoric information prior to the start date will remaindifficult.

The scale of Edgen Corp.'s operation is modest compared to someits competitors. Edgen had revenue of $150 million in 2003,significantly below 2002 levels of $229 million, which was thehighest level in the past several years. Edgen competes againstseveral much larger distributors as well as manufacturers andfabricators in various product segments.

Acquisitions will also remain a meaningful part of Edgen Corp.'sgrowth strategy going forward. Over the next four years,management forecasts a significant amount of EBITDA growth tooccur from international and MRO expansion. Moody's ratings couldbe jeopardized by a large debt financed acquisition or integrationissues.

The proposed transaction will also result in significantly higherinterest expense, which is forecast to increase to approximately$10 million after the transaction versus $3.4 million for fullyear 2003. Asset coverage will also be weak with net tangiblebook value of total assets forecasted at about $100 million,although the market value of various assets could be considerablyless.

In regards to liquidity, Moody's views the new $20 million bankrevolver as modest. A continuation of rising prices and demandcould require working capital investment in excess of the revolvercommitment. We are also skeptical about the company's ability toreduce working capital, in terms of days of sales, as outlined inits forecast.

Access to the revolver will be limited by a borrowing basecalculation of eligible account receivables and inventory.However, as of November 30, 2004, the borrowing base of eligiblereceivables and inventory was well in excess of the revolveramount.

The stable outlook reflects Moody's view that Edgen's operatingperformance will continue to improve, margins will remain at leastat current levels, liquidity will remain adequate, and anyincrease in costs will be passed through to the end user. Factorsthat could negatively impact the ratings and outlook are a steadydecline in operating performance, tightening margins,deterioration in liquidity, or weakening credit statistics.Whereas, a sustainable improvement in sales and operating marginsthat result in stronger credit metrics, greater liquidity, andincreased market presence would reflect positively on the ratings.

The B3 rating on the senior secured notes reflect its position asthe predominant debt security in the capital structure, resultingin the risk to a senior secured noteholder being no different thanthat of the senior implied rating. The rating also incorporatesthe benefit derived by a first lien security interest in alldomestic tangible and intangible assets of Edgen Corp. with theexception of inventory and receivables, in which the notes willhave a second lien security interest after the bank facility. Thenotes are also unconditionally guaranteed on a senior securedbasis by all restricted domestic subsidiaries.

Assignment of the SGL-3 speculative liquidity rating reflectsMoody's view that the company possesses adequate liquidity andwill likely rely on external sources of committed financing.There are no financial covenants under the proposed $20 millionbank agreement and availability is governed by a borrowing baseformula. Moody's believes cash on the balance sheet will remainmodest over the next twelve months and the company does notcurrently own any assets, outside of what is secured by the twopieces of debt, which can be monetized in the near term to satisfyliquidity needs.

Edgen Corporation, headquartered in Baton Rouge, Louisiana is aglobal distributor of specialty steel pipe, fittings, and flangesfor use in niche markets, primarily in the oil, gas, processingand power generation industries.

FEDERAL-MOGUL: Court Okays Jefferies' Amended Services as Advisor-----------------------------------------------------------------The Official Committee of Unsecured Creditors of Federal-MogulCorporation seeks the United States Bankruptcy Court for theDistrict of Delaware's authority to restate and replace the termsof Jefferies & Company, Inc.'s continued retention as financialadvisor to include valuation and syndication advisory services.The additional services to be performed by Jefferies relate to andare needed in order to confirm and consummate the Third AmendedJoint Plan of Reorganization, Eric M. Sutty, Esq., at The BayardFirm, in Wilmington, Delaware, explains.

Additional Services

The Plan provides that the Asbestos Personal Injury Trust is tosubscribe for certain shares of Reorganized Federal-Mogul Class BCommon Stock. Jefferies will serve as the lead financial advisorin connection with the completion of a "qualified appraisal"within the meaning of Treasury Regulations Section 1.468 B-3(b) ofthe Class B Shares to be allocated to the Trust under the terms ofthe proposed Plan, taking into account the transfer restrictionsplaced on the Class B Shares. The valuation is needed for thepurpose of supporting a tax deduction for the allocation to theTrust of the Class B Shares.

Jefferies will serve as Syndication Advisor with respect to theexit financing for the Federal-Mogul Corporation and its debtor-affiliates' cases. The exit financing consists of a $500 millionsenior secured asset-based revolving credit facility and a $933million senior secured term facility.

For the Additional Services, Jefferies will be paid, in theaggregate:

(a) $350,000 for the Valuation Services

The $350,000 cash fee will be paid after delivery of the "Class B Shares Valuation Report" to the Plan Proponents containing the results of the Valuation Services with respect to the Class B Shares; and

(b) $1 million for the Syndication Advisory Services

A $250,000 fee will be paid to Jefferies as soon as commitments for any revolving credit portion of the exit financing facility are obtained. A $750,000 fee will be paid to Jefferies when the exit financing facility has been funded.

Furthermore, the indemnification and contribution obligations toJefferies and other Indemnified Parties will remain the same,except that the obligations will also extend to liabilities andexpenses incurred, related to or arising out of or in connectionwith any of the Additional Services or the Class B SharesValuation Report.

Type of Business: The Debtor is the parent company of a group of companies that operate fine jewelry stores located in strip centers and regional malls in the southeastern United States. See http://www.friedmans.com/

The preliminary ratings are based on information as ofJan. 14, 2005. Subsequent information may result in theassignment of final ratings that differ from the preliminaryratings.

The preliminary ratings reflect the credit support provided by thesubordinate classes of securities and the geographic and propertytype diversity of the mortgaged properties securing the underlyingCMBS collateral. The collateral pool consists of 42 classes ofpass-through certificates from 16 CMBS transactions.

A copy of Standard & Poor's complete presale report for thistransaction can be found on RatingsDirect, Standard & Poor's Web-based credit analysis system, at http://www.ratingsdirect.com/The presale can also be found on the Standard & Poor's Web site athttp://www.standardandpoors.com/ Select Credit Ratings, and then find the article under Presale Credit Reports.

Fitch's individual rating for CMB, which reflects the bank'sstand-alone business and financial profile, recognizes theexperienced management of the bank, majority of outside directorsas required by Utah law, well defined and modest-risk businessplan, and maintenance of conservative capital levels. The bankalso benefits from the competitive position of CMH, which, throughits subsidiaries, is a large originator and servicer of commercialmortgages, primarily in the U.S. but growing internationally.These strengths are tempered by the de novo nature of theinstitution, niche focus on commercial mortgages, and lack of abroader funding profile. The individual rating will be influencedby CMB's ability to sustain acceptable levels of profitability andcredit quality while further developing its funding sources.

While CMB's commercial mortgage finance business is unrelated toits ultimate parent, General Motors -- GM, the long-term andshort-term ratings primarily reflect CMB's ownership by GM. Thelong-term rating for GM is currently 'BBB' with a Negative RatingOutlook and reflects GM's structural and competitive pressures inthe automotive industry. The Rating Outlook for CMB is a functionof GM's Rating Outlook. The '2' support rating reflects Fitch'sview that there would be a high probability of financial supportfrom its parent organization and indicates that the source ofsupport is rated at least 'BBB-'.

CMB commenced operations in April 2003 as a Utah-based industrialbank. The bank was primarily established to enhance fundingalternatives for CMH, and at Sept. 30, 2004, CMB reported $1.7billion of assets and $468 million in equity capital.

GOSHAWK RIDGE: Disclosure Statement Hearing Set for Jan. 25----------------------------------------------------------- The Honorable Gregg W. Zive of the U.S. Bankruptcy Court for theDistrict of Nevada will convene a hearing at 2:00 p.m., onJan. 25, 2005, to consider the adequacy of the DisclosureStatement explaining the Chapter 11 Plan of Reorganization filedby Goshawk Ridge Development, Ltd.

GRAFTECH INTL: Files Required Supplement to Registration Statement------------------------------------------------------------------GrafTech International Ltd. (NYSE:GTI) has filed with theSecurities and Exchange Commission a customarily requiredprospectus supplement to its previously filed registrationstatement covering resales by holders of its outstandingconvertible senior debentures. Under the registration rightsagreement relating to the debentures sold in a private offering inJanuary 2004, GTI is required to file a prospectus supplement toinclude or update information about those holders within 45business days after it receives a proper request to do so. GTI mayfile prospectus supplements on a monthly or other periodic basisto accommodate those requests. GTI's obligation to supplement theregistration statement expires no later than Jan. 22, 2006.

The debentures are convertible into GTI common stock at an initialconversion price of approximately $16.58 per share if the price ofGTI's common stock exceeds 125% of the conversion price, orapproximately $20.73 per share, for specified periods or thedebentures are called for redemption by GTI and upon othercustomary events.

The debentures and shares of common stock issuable upon conversionthereof have not been and may not be offered or sold in the UnitedStates absent registration under the Securities Act of 1933 or anapplicable exemption from the registration requirements of theSecurities Act of 1933.

This press release is not an offer to sell or the solicitation ofan offer to buy, nor shall there be any sale of, these securitiesin any state or jurisdiction in which such offer, solicitation orsale would be unlawful prior to registration or qualificationunder the securities laws of any such state or jurisdiction.

About the Company

GrafTech International Ltd. is one of the world's largestmanufacturers and providers of high quality synthetic and naturalgraphite and carbon based products and technical and research anddevelopment services, with customers in about 60 countries engagedin the manufacture of steel, aluminum, silicon metal, automotiveproducts and electronics.

* * *

As reported in the Troubled Company Reporter on Nov. 12, 2004,Standard & Poor's Rating Services affirmed its ratings on GrafTechInternational Ltd. and removed them from CreditWatch where theywere placed with negative implications on October 11, 2004. Theoutlook is negative. The corporate credit rating on GrafTech isaffirmed at 'B+', the senior unsecured debt rating at 'B', andconvertible debt rating at 'B-'.

"Despite the affirmation and improved fundamentals for graphiteelectrodes, the negative outlook reflects concerns about thecompany's ability to improve in a timely manner a financialperformance that is still weak for the rating," said Standard &Poor's credit analyst Dominick D'Ascoli. This is in light ofcontinual cost pressures, uncertainties about the needle cokemarket for 2006 and beyond, and limited free cash flow generationat GrafTech.

The preliminary ratings are based on information as ofJan. 14, 2005. Subsequent information may result in theassignment of final ratings that differ from the preliminaryratings.

The preliminary ratings reflect the credit support provided by thesubordinate classes of certificates, the liquidity provided by thefiscal agent, the economics of the underlying loans, and thegeographic and property type diversity of the loans. Standard &Poor's analysis determined that, on a weighted average basis, thepool has a debt service coverage of 1.50x, a beginning LTV of90.6%, and an ending LTV of 82.5%.

A copy of Standard & Poor's complete presale report for thistransaction can be found on RatingsDirect, Standard & Poor's Web-based credit analysis system, at http://www.ratingsdirect.com/The presale can also be found on the Standard & Poor's Web site athttp://www.standardandpoors.com/ Select Credit Ratings, and then find the article under Presale Credit Reports.

Also, a 'B' rating was assigned to the company's proposed$165 million senior unsecured notes due 2013. These notes will beissued pursuant to Rule 144A. Proceeds from the note issuancewill be used to pay for the acquisition of Gregg Appliances Inc.and cover fees and expenses.

Pro forma for this transaction, Gregg will have $183 million ofdebt, or $268 million of lease-adjusted debt. EBITDA for thetrailing 12 months will be $37 million. Total lease-adjusted debtto EBITDA will be high, at 5.9x.

Assuming an annual interest expense of roughly $22 million peryear, EBITDA interest coverage will be in the mid 1x area. Whilethese credit measures are consistent with current rating levels,Standard & Poor's believes that Gregg has no flexibility to do asizable debt-financed acquisition for the next two to three years.In addition, ratings for the senior unsecured notes assume thatdrawings under the company's unrated bank facility will not bematerial.

Indianapolis, Indiana-based Gregg is a specialty retailer ofappliances, televisions, home theater systems, and audio products.It operates 58 stores located throughout the Midwestern andSoutheastern U.S. under the HH Gregg brand, averaging 30,000square feet in size. A large percentage of the company's revenuesare generated from the sales of video products (49% ofrevenues) and appliances (41% of revenues).

The outlook is stable. This is the first time that GreggAppliances, Inc. has been rated. The proceeds of the proposedsenior notes will be used to finance a portion of the purchase byFreeman Spogli of a majority interest in Gregg Appliances througha leveraged recapitalization. The total transaction value is$307.2 million.

Freeman Spogli will invest $111.2 million for approximately 80% ofthe common equity and existing management will invest $27.8million. In addition, existing shareholders will hold $25million(face amount) of junior subordinated seller notes.

The ratings reflect the company's small size ($753 million revenuebase), regional geographic concentration (primarily MidwesternU.S.), and its operation in a very competitive space against muchlarger and better-capitalized industry players, including themajor big box merchandisers. The ratings also reflect thecompany's high funded leverage.

In addition, the ratings encompass the risks and benefitsassociated with its new store growth strategy, which is beingstepped up from historical levels. While the company's growthstrategy is based on a systematic approach which includes ensuringthe distribution system is in place prior to entering new marketsand a focus on markets that lack an existing strong regionalcompetitor, the pace of planned new store additions is highrelative to the existing store base and is targeted at new marketsto expand the company's geographic coverage.

The ratings also consider solid free cash flow generation for therating level, though a significant portion of free cash flow stemsfrom tax benefits associated with the 338(h)(10) tax election madeas part of the purchase by Freeman Spogli.

The ratings gain support from the longer-term capital structurewith little required amortization over the next few years. Inaddition, the company's business strategy, which focuses onsuperior customer service, product knowledge, and premium productselection at competitive prices, has effectively positioned it inthe marketplace.

The stable outlook reflects the expectation that the company willbe able to self-fund its new store growth strategy-both capitalexpenditures and working capital investment-as well as its workingcapital needs for its existing store base. The ratings are notlikely to be upgraded over the near term, given the company'sgrowth plans, size and regional concentration, but could gainsupport over time as the footprint expands and if financialmetrics are improved and are expected to be sustained at betterlevels, such that funded debt to EBITDA falls below 3.0x, freecash flow to total debt rises above 10%, and total coverage riseincreases to above 2.0x.

The ratings could move downward should the company lose its 338(h)tax election, causing a drain on free cash flow, or shouldadjusted debt to EBITDAR rise above 6.0x or interest coverageshould fall below 1.25x.

The senior notes are rated at the senior implied level given theirpreponderance in the capital structure relative to the expectedminimal usage of the company's $75 million asset based facility.The issuer rating is at the same level as the senior implied sinceGregg Appliances is predominantly an operating company.

For the fiscal year ended March 31, 2005, Moody's expects totalsales to be approximately $800 million. Proforma for the leveragerecapitalization transaction, Moody's expects FY 2005 adjusteddebt/EBITDAR to be 5.8x, free cash flow to total debt to be 6.7%,and total coverage to be 1.2x.

Gregg Appliances' SGL-2 liquidity rating reflects Moody'sexpectation that the company will maintain good liquidity, andthat internally generated cash flow and cash on hand will besufficient to fund its working capital, capital expenditure anddebt amortization requirements for the next 12 months. TheCompany's $75 million revolving credit facility is expected tohave only minimal usage, providing it with a good external sourceof liquidity. Availability under the credit agreement is subjectto one financial covenant, fixed charge coverage, and it is to bemeasured only if excess availability falls below $8.5 million atany time.

Gregg Appliances is not expected to be in a position to triggerthat covenant and is expected to have ample cushion over thiscovenant, if triggered. The Company has limited alternativesources of liquidity since its assets are fully encumbered and thecompany will have difficulty accessing the capital marketsfollowing the acquisition of a majority interest by Freeman Spogli& Co.

Gregg Appliances, Inc., headquartered in Indianapolis, Indiana, isa specialty retailer of consumer electronics, home appliances andrelated services operating under the name HH Gregg. The Companyoperates 58 stores in 6 midwestern and southeastern states withrevenues of approximately $753 million for the fiscal year endedMarch 31, 2004.

HEADLINE MEDIA: Nov. 30 Balance Sheet Upside-Down by $7.6 Million-----------------------------------------------------------------Headline Media Group, Inc., is a media company focused on thespecialty television sector through its main asset, The ScoreTelevision Network. The Score is a national specialty televisionservice providing sports, news, information, highlights and liveevent programming, available across Canada in over 5.5 millionhomes.

The Company focuses its analysis on "Net income (loss) beforeinterest, income taxes, depreciation and amortization" and Netincome (loss). Net income (loss) before interest, income taxes,depreciation and amortization and Net income (loss) are reconciledin the table below. Net income (loss) before interest, incometaxes, depreciation and amortization is calculated as earnings(loss) from continuing operations before interest, income taxes,depreciation and amortization.

Net income (loss) before interest, income taxes, depreciation andamortization is not a measure of performance under Canadian GAAP.Net income (loss) before interest, income taxes, depreciation andamortization should not be considered in isolation or as asubstitute for Net income (loss) prepared in accordance withCanadian GAAP or as a measure of operating performance orprofitability. Net income (loss) before interest, income taxes,depreciation and amortization does not have a standardized meaningprescribed by GAAP and is not necessarily comparable to similarmeasures presented by other companies.

The Company uses Net income (loss) before interest, income taxes,depreciation and amortization to remove acquisition and investmentrelated charges (such as depreciation and amortization),discontinued operations, and income taxes which in the Company'sview do not adequately reflect its core operating results and is astandard measure that is commonly reported and widely used in theindustry to assist understanding and comparing operating results.

Consolidated Results

Revenue for the first quarter increased by $0.9 million to$6.1 million compared to 5.2 million in the prior year. Thisincrease was due to an increase in subscriber fee revenueamounting to $0.8 million and an increase in advertising revenueof $0.1 million.

Operating expenses excluding rights fees increased by $0.5 millionduring the quarter to $4.8 million compared to $4.3 million in theprior year. The increase was primarily due to increasedprogramming and production expenses at The Score due to the launchof several new shows, as well as some increased administrativeexpenses associated with expanded production facilities.

Program rights expenses were $0.3 million during the quarter,compared to $1.3 million in the prior year. The reduction inprogram rights at The Score reflects lower program rights fees onWorld Wrestling Entertainment properties as well as lower programrights costs for other programs.

Net income from continuing operations before interest, incometaxes, depreciation and amortization for the Company for the threemonths ended November 30, 2004, was $1.0 million, an increase of$1.4 million from a loss of $0.4 million in the same period lastyear. This arose due to its increase in revenues and decrease inprogram rights, offset in part by an increase in operatingexpenses.

Interest expense for the first quarter was approximately $0.2million compared to approximately $0.3 million in the prior year.The decrease of approximately $0.1 million reflects lower bankborrowings as well as lower borrowings on a credit facilityprovided by a related party. The reductions in both creditfacilities resulted from improved cash flows from operationsduring fiscal 2004 as well as the proceeds received on the sale ofa discontinued operation.

Depreciation and amortization expense of $0.3 million in the firstquarter was comparable to the prior year. For the three monthsended November 30, 2004, and 2003, fixed asset additions amountedto $0.5 million and $0.7 million respectively.

Net income from discontinued operations for the Company for thethree months ended November 30, 2004, was nil, an increase of$77,000 from a loss of $77,000 in the same period last year. Thelatter amount reflects the financial results of PrideVision TV andSt. Clair Group Investments Inc. On November 28, 2003, the Boardof Directors of PrideVision Inc. approved an agreement to sellthe Canadian operations of PrideVision TV, a Category 1 digitalspecialty television service, focused on the gay, lesbian,bisexual and transgender communities. On July 29, 2004,PrideVision Inc. completed the previously approved transaction fortotal cash proceeds of $1.350 million and the assumption of $0.9million in liabilities. The transaction resulted in a gain of$1.6M. In addition, during fiscal 2004, the operations of St.Clair were substantially restructured, and ultimately discontinuedin October 2004 as a result of certain sports marketing contractswhich were not renewed.

Net income for the three months ended November 30, 2004 was $0.5million or $0.01 per share based on a weighted average 82.8million Class A Subordinate Voting Shares and Special VotingShares outstanding compared to a loss of $1.1 million in the prioryear or ($0.01) per share based on a weighted average 82.6 millionClass A Subordinate Voting Shares and Special Voting Sharesoutstanding.

Liquidity and Capital Resources

Cash flows used in continuing operations for the three monthsended November 30, 2004, were $0.7 million compared cash flowsprovided by continuing operations of $0.2 million in the prioryear reflecting significantly improved income from continuingoperations in the current year offset by working capitalmovements. Cash flows provided by discontinued operations were$0.3 million compared to cash flows used by discontinuedoperations of $0.2 million in the prior year.

For fiscal 2005, the Company anticipates that cash flows providedby operations will increase compared to fiscal 2004 based onanticipated increases in both advertising and subscriber revenueswith more moderate increases in operating expenses. The Companyhas sufficient working capital lines of credit to support itsoperations and anticipates that these lines of credit will besuccessfully refinanced on the maturity dates.

Cash flow provided by financing activities for the three monthsended November 30, 2004, was $0.5 million compared to nil in theprior year as a result of a drawdown by the Company on its line ofcredit provided by a related party. At November 30, 2004, totalshort-term loans were $12.4 million compared to $14.3 million asat November 30, 2003.

As discussed below, the Company has a bank credit facility and asecured standby credit facility currently authorized in the amountof $16.3 million. Both facilities, which are classified ascurrent liabilities, mature on August 31, 2005. The Companyanticipates that it will be able to refinance both of thesefacilities on or before their respective maturity dates.

Cash flows used in investment activities for the three monthsended November 30, 2004, was $0.5 million compared to cash flowused in investment activities of $0.7 million in the prior year.

These amounts relate to capital expenditures to expand and improveprogramming and production facilities at The Score TelevisionNetwork.

For the entire fiscal 2005 year, the Company anticipates thatexpenditures on new and replacement fixed assets will beapproximately $1.8 million, which can be financed by cash flowsfrom operations.

Other than the credit facilities described below, the Company hasno other financial instruments and thus believes that there are noprice, credit or liquidity risks that it could be subject to fromsuch instruments.

The following is a summary of the significant financing activitiesundertaken by the Company during the years ended August 31, 2004,and 2003 to secure financing for its ongoing business operations:

* The Score

In April 2004, the Company's subsidiary, The Score, amended its bank credit facility, which was initially established December 2001. The amended bank credit facility allows The Score to borrow up to $15.0 million reducing to $14.5 million on August 31, 2004, and $14.0 million on February 28, 2005, by way of prime rate loans, bankers' acceptances or letters of guarantee. The bank credit facility matures August 31, 2005. Prime rate loans bear interest at the prime rate plus 3.25%. Bankers' acceptances bear interest at bankers' acceptances rates plus 4.25%. Loans under the bank credit facility are secured by a pledge of substantially all of the assets of The Score, including the pledge of The Score shares and the subordination and pledge of shareholder loans and inter- company debt from the Company to The Score. The loans are secured and are pledged and subordinated to the credit facility. The provisions of the amended bank credit facility impose restrictions on The Score, the most significant of which are debt incurrence and debt maintenance costs, restrictions on additional investments, sales of assets, payment of management fees or other distributions to shareholders, restrictions on entering into new or renewed programming rights agreements, and the maintenance of certain financial covenants. Financial covenants include meeting minimum earnings before interest, taxes, depreciation and amortization (EBITDA), maximum capital expenditure amounts and minimum aggregate free cash flow. In addition, the agreement has a number of events of default, including solvency tests for the Company and The Score. The Score maintained compliance with all of its financial covenants and other restrictions during fiscal 2004 and the first quarter of fiscal 2005. As at November 30, 2004, $11.9 million of the bank credit facility had been drawn. The Score is prohibited under the bank credit facility from advancing funds to the Company other than for services provided in the ordinary Course of business. The Score and the Company have sufficient financial resources to finance their respective operations for fiscal 2005. With the financing arrangements currently in place and the refinancing of The Score's bank credit facility that matures on August 31, 2005, to be available to finance the consolidated operations, the Company believes that there are sufficient resources to fund operations. In August 2002, The Score entered into a credit facility agreement for a $2.0 million operating loan with Levfam Finance Inc., a company related by virtue of common control. In August 2003, the Company advanced approximately $2.4 million of the proceeds of a $4.9 million private placement of Class A Subordinate Voting Shares to The Score to fund the repayment of the operating loan plus accrued interest. The credit facility was repaid in full in August 2003.

* Headline Media Group Inc.

In April 2002, the Company entered into a secured standby credit facility of up to $2.3 million with Levfam Finance Inc., a company related by virtue of common control. The credit facility was subsequently amended in November 2002 and August 2003 and now matures on August 31, 2005. The credit facility bears interest at 12% per annum. The standby credit facility is secured by a first charge over all of the Company's assets, with the exception of its shares in The Score and St. Clair Group Investments Inc. As at August 31, 2004, $0.2 million of accrued interest on this facility was outstanding. In January 2003, the Company secured $0.5 million from a non-brokered private placement of 1,428,571 Class A Subordinate Voting shares with Levfam Holdings Inc., the Company's controlling shareholder, at a price of $0.35 per share. In August 2003, the Company issued 16,333,333 Class A Subordinate Voting Shares by way of a non-brokered private placement at a price of $.30 per share, for gross proceeds of $4.9 million. The Company's successful execution of its business plan is dependant upon a number of factors that involve risks and uncertainty. In particular, revenues in the specialty television industry, including subscription and advertising revenues are dependant upon audience acceptance, which cannot be accurately predicted.

* Related Party Transactions

The Company and Levfam Finance Inc. are related by virtue of Common control. Levfam Finance Inc. has provided credit facilities to both The Score and Headline Media Group, its parent company. Interest on the Levfam Finance Inc. credit facility to Headline Media Group amounted to approximately $10,000 during the three months ended November 30, 2004, compared to approximately $ 37,000 in the corresponding quarter of the prior year. During the three months ended November 30, 2004, the Company retained legal services from a firm, one of whose partners is a director of the Company. These services were provided in the ordinary course of business and the fees for services rendered amounted to $21,640 in the first quarter of fiscal 2005. A second director provided consulting services for the Company during the three months ended November 30, 2004, and received approximately $12,000 for such services. All related party transactions have been recorded at their fair values.

Contractual Obligations

The Company has no debt guarantees, capital leases or long-term obligations other than loans which are disclosed on theConsolidated Balance Sheets as at November 30, 2004, andAugust 31, 2004.

In 2003, the CICA amended Handbook Section 3870, "Stock-basedCompensation and Other Stock-based Payments", to require therecording of compensation expense on the granting of allstock-based compensation awards, including stock options toemployees, calculated using the fair value method. TheCompany adopted this standard on September 1, 2004.

About Headline Media Group Inc.

Headline Media Group Inc. (TSX: HMG) is a media company focused onthe specialty television sector through its main asset, The ScoreTelevision Network. The Score is a national specialty televisionservice providing sports, news, information, highlights and liveevent programming, available across Canada in over 5.5 millionhomes.

The Plan groups claims and interests into four classes andprovides for these recoveries:

a) Class 1 impaired claims consisting of the General Electric Capital Corp. Secured Bank Loan Claims will be paid in full on or after the Effective Date after the payment of all Administrative Claims, Priority Tax Claims and distributions to the General Unsecured Creditor Class;

b) Class 2 impaired claims consisting of General Unsecured Claims will receive a Pro Rata share of the value of the title vehicles sold in the Wastequip asset sale and a Pro Rate portion of pf all recoveries from all Avoidance Actions;

c) Class 3impaired claims consisting of Equity Interests will not receive and retain any property or distributions under the Plan; and

d) Class 4 unimpaired claims consisting of Priority Claims will be paid in full on the Effective Date.

The Plan also identifies three unclassified claims and providesfor these recoveries:

a) Allowed Administrative Claims will be paid in full on the Effective Date;

b) Allowed Priority Tax Claims will be paid in full on the Effective Date; and

c) Professional Fees will be paid in amounts that are allowed upon the Court's order.

Full-text copies of the Disclosure Statement and Amended Plan areavailable for a fee at:

All ballots for acceptance or rejection of the Plan must becompleted and delivered to Hahn, Loeser Parks LLP, the Debtor'sclaims and noticing agent on or before February 18, 2005.

Confirmation objections to the Plan, if any, must be filed andserved by February 25, 2005.

Headquartered in Wooster, Ohio, Hi-Rise Recycling Companies, Inc.,manufactures and distributes industrial recycling and wastehandling equipment in North America. The company filed forchapter 11 protection on August 16, 2004 (Bankr. N.D. Oh. Case No.04-64352). Lawrence E. Oscar, Esq., at Hahn Loeser & Parks LLP,represent the Debtor in its restructuring. When the Debtor filedfor protection from its creditors, it listed estimated assets of$1 million to $10 million and debts of $10 million to $50 million.

HOLLINGER INC: To Escrow Some Funds from Telegraph Sale Proceeds---------------------------------------------------------------- Hollinger, Inc.'s (TSX:HLG.C)(TSX:HLG.PR.B) Board of Directors hasdetermined that it is in the best interest of Hollinger'sshareholders that certain of the funds Hollinger will receive fromHollinger International, Inc., relating to the sale of TheTelegraph Group be placed in escrow.

As part of its settlement discussions with staff of the U.S.Securities and Exchange Commission relating to the actioncommenced by the SEC against Hollinger and its former directorsand senior executives, Conrad M. Black and F. David Radler in theU.S. District Court, Northern District of Illinois, Hollinger hasvoluntarily agreed that it will enter into an arrangement wherebyit will deposit:

(i) the net amount to be received by it directly and indirectly from the special dividend declared on Dec. 16, 2004 by the Board of Directors of HII on its Class A Common Stock and its Class B Common Stock that is payable on Jan. 18, 2005, and

(ii) subject to any overriding rights of the holders of Hollinger's outstanding Senior Secured Notes, the net amount of any subsequent distribution made by HII of The Telegraph Group sale proceeds, if any, into an escrow account with a licensed trust company.

The escrow will terminate upon the conclusion of the SEC Action asto all parties.

The escrow arrangements will provide that Hollinger will haveaccess to the escrowed funds for ordinary business and certainother purposes, including:

-- Payment of principal, interest, premium and fees, if any, on or relating to Hollinger's indebtedness for borrowed money.

-- Payment of dividends on the preferred shares of Hollinger.

-- Buy-back of non-Ravelston shares of Hollinger.

-- Acquisition of assets other than from Ravelston and certain of its affiliates.

The escrow is subject to Hollinger and the SEC agreeing to amutually acceptable termination date for the escrow should theparties be unable to reach an overall settlement of the SEC Actionas against Hollinger in the near future. If termination of thearrangement occurs, Hollinger has agreed to provide staff of theSEC a reasonable opportunity to assert any rights it may have withrespect to the escrowed funds.

Hollinger's principal asset is its interest in HollingerInternational Inc. which is a newspaper publisher the assets ofwhich include the Chicago Sun-Times, a large number of communitynewspapers in the Chicago area, a portfolio of news mediainvestments and a variety of other assets.

* * *

As reported in the Troubled Company Reporter on August 31, 2004,as a result of the delay in the filing of Hollinger's 2003 Form20-F (which would include its 2003 audited annual financialstatements) with the United States Securities and ExchangeCommission by June 30, 2004, Hollinger is not in compliance withits obligation to deliver to relevant parties its filings underthe indenture governing its senior secured notes due 2011.Approximately $78 million principal amount of Notes is outstandingunder the Indenture. On August 19, 2004, Hollinger received aNotice of Event of Default from the trustee under the Indenturenotifying Hollinger that an event of default has occurred underthe Indenture. As a result, pursuant to the terms of theIndenture, the trustee under the Indenture or the holders of atleast 25 percent of the outstanding principal amount of the Noteswill have the right to accelerate the maturity of the Notes.

Approximately $5 million in interest on the Notes was due onSeptember 1, 2004. Hollinger has deposited the full amount of theinterest payment with the trustee under the Indenture andnoteholders will receive their interest payment in a timelymanner.

There was in excess of $267.4 million aggregate collateralsecuring the $78 million principal amount of the Notesoutstanding.

Hollinger also received notice from the staff of the MidwestRegional Office of the U.S. Securities and Exchange Commissionthat they intend to recommend to the Commission that it authorizecivil injunctive proceedings against Hollinger for certain allegedviolations of the U.S. Securities Exchange Act of 1934 and theRules thereunder. The notice includes an offer to Hollinger tomake a "Wells Submission", which Hollinger will be making, settingforth the reasons why it believes the injunctive action should notbe brought. A similar notice has been sent to some of Hollinger'sdirectors and officers.

In addition to manufacturing inefficiencies from lower salesvolume, margin deterioration was exacerbated by higher commodityprices (steel, plastics, wood, and paper products) and increasedtransportation costs. While sales in the month of December 2004were up by mid-single digits year-over-year and the company hasplans to raise prices to its customers, these steps are unlikelyto materially improve margins.

INTELSAT LTD: Zeus Evaluates Acquisition Following IS-804 Failure-----------------------------------------------------------------Intelsat, Ltd., said its IS-804 satellite experienced a sudden andunexpected electrical power system anomaly on Jan. 14, 2005, atapproximately 5:32 p.m. EST that caused the total loss of thespacecraft. In accordance with existing satellite anomalycontingency plans, Intelsat is in the process of makingalternative capacity available to its IS-804 customers. Thesatellite, launched in 1997, furnished telecommunications andmedia delivery services to customers in the South Pacific.Intelsat and Lockheed Martin Corporation, the manufacturer of thesatellite, are working together to identify the cause of theproblem. Intelsat currently believes that there is no connectionbetween this event and the recent IA-7 satellite anomaly as thetwo satellites were manufactured by two different companies andtheir designs are different.

A number of Intelsat-operated satellites in the region are beingutilized to restore service to affected customers, and many endusers of IS-804 capacity are already operating normally usingreplacement capacity. Intelsat has also begun working with otherfleet operators where necessary to ensure the quickest possiblerestoration of service for customers.

"The loss of a satellite is an extremely rare event for us, andour first priority must be restoration of service to ourcustomers," said Conny Kullman, CEO of Intelsat, Ltd. "Intelsatremains firmly committed to the region that was covered by IS-804,and all necessary effort and assets will be allocated to ensureIntelsat satellite coverage throughout the Asia-Pacific region."

Intelsat expects to record a non-cash impairment charge ofapproximately $73 million to write off the value of the IS-804satellite. The IS-804 was not insured, in accordance withIntelsat's practice of insuring only those satellites with a netbook value greater than $150 million.

Under the terms of the Transaction Agreement and Plan ofAmalgamation for the sale of Intelsat dated Aug. 16, 2004, amongIntelsat, Ltd., Intelsat (Bermuda), Ltd., Zeus Holdings Limited(Zeus Holdings), Zeus Merger One Limited and Zeus Merger TwoLimited, the total loss of the IS-804 satellite gives ZeusHoldings the right to not consummate the acquisition of Intelsat.Zeus Holdings has advised Intelsat that it is evaluating theimpact of the IS-804 failure.

In Late December 2004, Intelsat received the necessary approvalfrom the U.S. Federal Communications Commission to proceed withthe proposed purchase of Intelsat, Ltd., by Zeus Holdings Ltd.

Shareholder approval of the proposed acquisition was received inearly 2004.

Zeus Appoints New CEO for Intelsat

As previously disclosed, Zeus Holdings Limited said Dave McGlade-- the CEO of cellular operator O2 UK, a subsidiary of mmO2 plc -- has agreed to become CEO of Intelsat, Ltd., following the closingof the proposed Zeus Holdings/Intelsat transaction, which isexpected to occur in the first quarter of this year. After thetransaction closes, Mr. McGlade will join Intelsat upontermination of his current commitments at mmO2 plc on 31st March2005, at which point, Conny Kullman, Intelsat's current CEO, willbecome Chairman of the board of directors of Intelsat, Ltd.

Mr. McGlade has extensive senior executive experience in thetelecommunications industry, and has for the last four years ledthe turnaround of O2 UK, mmO2 plc's UK cellular operation. Duringthese four years, and in a highly competitive environment, Mr.McGlade has grown O2 UK's customer base to over 14 million withservice revenues and operating profits of 1.8 billion pounds and341 million pounds respectively in the six months to 30 September2004. This represents year-on-year service revenue and operatingprofit growth of 20 per cent and 40 per cent respectively and as aresult of this performance, since the beginning of this financialyear, mmO2 has increased its O2 UK full year service revenuegrowth guidance to the financial markets from 5 to 8 per cent to12 to 15 percent. To complement these organic activities, Mr.McGlade led the creation of a joint venture with Tesco, the UK'slargest retail group, positioning O2 uniquely to addressunderserved market segments.

Prior to joining mmO2, Mr. McGlade worked in the US cellularindustry as West Region President for Sprint PCS, and in the cableindustry where he was President of Cable AdNet, the then largestlocal and regional cable advertising network and subsequently asVice President of TCI Telephony Services.

Commenting on the appointment, Conny Kullman said, "Dave is anaccomplished telecom executive and has considerable experience ina number of adjacent markets. He has demonstrated on a number ofoccasions his ability to transition seamlessly across differentparts of the telecoms landscape. Dave has a strong and verycomplementary skill set and, assuming the transaction closes asexpected, I look forward to the opportunity to work with him inthe future."

A spokesperson for Zeus Holdings said, "We are delighted that Davehas agreed to accept this position following completion of ouracquisition. Dave has an exceptional track record of deliveringstrong operational performance in highly competitive markets andhas been instrumental to the success of businesses operatingacross the telecommunications and media industries."

The spokesperson added, "Under Conny's leadership, the Intelsatteam has made tremendous progress since Intelsat's privatization.We are very pleased that Conny will continue as Chairman of theboard following the transaction, and believe that Conny's deepknowledge of the business and Dave's enormous drive, combined,provide a great springboard as Intelsat faces the excitingprospects ahead."

About Zeus Holdings Limited

Zeus Holdings is a company formed by a consortium of funds advisedby Apax Partners, Apollo Management, Madison Dearborn Partners andPermira to consummate the acquisition of Intelsat.

About Intelsat

As a global communications leader with 40 years of experience,Intelsat helps service providers, broadcasters, corporations andgovernments deliver information and entertainment anywhere in theworld, instantly, securely and reliably. Intelsat's global reachand expanding solutions portfolio enable customers to enhancetheir communications networks, venture into new markets and growtheir businesses with confidence. For further information,contact media.relations@intelsat.com or at +1 202-944-7500.

-- $200 Million 8.125% Eurobonds due in 2005 at Ba3 (Upon the close of the transaction, these notes share ratable in the same security as the senior secured bank credit facility at Intelsat (Bermuda) and benefit from the same senior secured operating company guarantees).

-- The speculative grade liquidity rating is at SGL-2

The ratings withdrawn:

-- Short-term rating will be withdrawn

At Intelsat Bermuda,

The ratings assigned:

-- $300 Million Sr. Secured Revolver due in 2011 - Ba3

-- $350 Million Sr. Secured T/L B due in 2011 - Ba3

-- Sr. Floating Rate Notes due in 2012 - B1

-- Sr. Fixed Rate Notes due in 2013 - B1

-- Sr. Fixed Rate Notes due in 2015- B1

The senior implied rating downgrade broadly reflects thesignificant leveraging of Intelsat Ltd.'s capital structure as aresult of the Zeus LBO. The rating also reflects Intelsat'soperational challenges, which are mostly a function of a shiftingbusiness focus to higher growth corporate and government as wellas video fixed satellite services from declining telecom FSSbusiness.

The rating is supported by Intelsat Ltd.'s significant revenuebacklog, which totals more than three years of the company'scurrent revenue levels (with approximately 99% non-cancelablecontracts or contracts cancelable with substantial penalties), andleading market share in the carrier, corporate, Internet andgovernment FSS. The ratings also benefit from Intelsat's highEBITDA margins and predictable capital spending needs, and stronggeographic coverage.

The downgrade of the existing Intelsat Ltd. senior unsecured notesreflects not only the increased leverage of the company as awhole, but also significant structural subordination resultingfrom the new financing.

The stable rating outlook is based on Moody's view that IntelsatLtd.'s revenue decline will moderate during the outlook period andthat EBITDA margins, capital spending, and free cash flowgeneration will remain steady. The stable outlook alsoincorporates Moody's expectation that Intelsat will begindeleveraging from free cash flow generation in 2005 and 2006.

Since Moody's expects that Intelsat Ltd.'s capital spending willbe between $85 million and $100 million per year in the near tointermediate term, and EBITDA margins will remain relatively flat,accelerated government or video segment revenue growth, coupledwith flattening carrier revenue, would positively impact ratings.Overall, total revenue growth in excess of 5% per annum, coupledwith declining net debt to EBITDA ("leverage") of less than 5.0x,or EBITDA less CAPEX to interest ("fixed charge coverage') ofgreater than 2.5x, would likely result in a positive ratingchange.

Likewise, prolonged revenue declines, a sharp decline in revenuebacklog of more than 10%, or a prolonged reduction in EBITDAmargins of greater than 300 basis points would likely result in anegative rating action. Any combination of events wherein leverageexceeds 6.25x, fixed charge coverage falls below 1.5 times, or thecompany introduces an aggressive dividend would also likely resultin a negative rating action.

In August 2004, Intelsat Ltd. agreed to be acquired by Zeus, acompany owned by a consortium of funds advised by Apax Partners,Apollo Management, Madison Dearborn Partners, and PermiraAdvisors, for approximately $3 billion, or $18.75 per share.Initially, the obligor of the senior secured bank facilities andthe $2.5 billion senior unsecured notes will be an indirectsubsidiary of Zeus who will amalgamate with Intelsat Bermudaconcurrently with the funding of the transaction. At that time,Intelsat Bermuda will become the obligor for the bank facilitiesand the notes.

Moody's notches the rating of the senior secured bank facility onenotch higher than Intelsat Ltd.'s B1 senior implied rating sinceit ranks ahead of close to 90% of the company's total debt,therefore, enjoying superior asset coverage. The bank facilitiesare secured by virtually all of the assets of Intelsat Bermuda andits subsidiaries and are guaranteed by these same subsidiaries aswell as Intelsat. Intelsat Bermuda's senior unsecured notes aresimilarly guaranteed but on a senior unsecured basis and compriseapproximately 55% of the company's total outstanding debt. Thenotes are not notched off the senior implied rating.

Intelsat Ltd.'s existing senior unsecured notes, which total $1.7billion, are rated B3, two notches below the senior implied ratingto reflect their structural subordination to Intelsat Bermuda'sdebt and other general unsecured liabilities. Until it matures inFebruary 2005, Moody's will rate Intelsat's $200 million 8.125%Eurobonds at Ba3 since this issue will benefit from the samesecurity package and guarantees as Intelsat Bermuda's bankfacilities. The Eurobond will be repaid with proceeds from a termloan drawdown.

Moody's believes that moderate growth in government, corporatenetwork and video service revenues will generally offset decliningcarrier revenues, which currently comprise approximately 28% ofIntelsat's total pro forma revenues. Moody's believes thatgrowing video revenues will be most challenging as Intelsat'sNorth American market position in this sector is still developingwith the Loral satellites ("Intelsat Americas") acquired in Marchof 2004. As a result, Moody's believes Intelsat's revenue growthduring the outlook period will be relatively flat and that EBITDAmargins will remain steady in the mid 60% range.

With the exception of the IA-8 satellite expected to launch inJune of 2005, Intelsat does not intend to launch any satellitesuntil 2010, therefore, Moody's believes Intelsat will consistentlygenerate solid free cash flow. While Intelsat has responded wellto minimize the financial loss caused by the failure of its IA-7satellite, satellite failure or malfunction is an inherentbusiness risk for a satellite company.

This risk is factored into Intelsat Ltd.'s rating and is not asignificant driver due to the company's solid operating trackrecord and operational flexibility provided by excess capacity inits current fleet and overlapping coverage areas. Satellitefailures, beyond Moody's expectations, could have a negativeimpact on the company's ratings.

Intelsat's SGL-2 speculative grade liquidity rating reflects thecompany's good liquidity position and Moody's belief that Intelsatcan comfortably meet its near-term operating, investment andfinancial obligations through both internal sources of funds andexternal committed financing. Moody's, however, expectsIntelsat's liquidity to weaken, on a proforma basis. Moody'sexpects Intelsat's cash balances to decline from approximately$400 million at 9/30/04, to less than $100 million on a proformabasis, adjusting for the $200 million October 2004 repayment ofthe 8.374% notes, the $92 million Comsat General purchase, and $22million in cash required to fund the Zeus transaction.

INTERACTIVE BRAND: Receives Delisting Notice from Amex------------------------------------------------------ Interactive Brand Development, Inc. (AMEX:IBD) ((f/k/a CareConcepts I, Inc.) received written notice from the Staff of theAmerican Stock Exchange that the Amex intends to proceed with thefiling of an application with the Securities and ExchangeCommission under Rule 12d2-2 of the Securities Exchange Act of1934, as amended, and pursuant to Section 1009(a) of the AmexCompany Guide, to delist the Company's common stock from the Amex.

The Staff's decision to file an application to delist theCompany's common stock is based upon the Staff's position that theCompany failed to satisfy certain specified listing standards.The Staff's written notice informed the Company that trading ofthe Company's common stock will not be suspended immediately;however, delisting procedures will be commenced and suchsuspension will result unless the Company successfully appeals theStaff's determination. In accordance with Amex Company Guideprocedures, the Company intends to file an appeal within 7 days ofthe above notice appealing the Staff's determination andrequesting a hearing before the Amex Listing Qualifications Panel,in accordance with the Amex Company Guide.

On January 13, 2005, the Company and its counsel met with theStaff to discuss the delisting notice. During the meeting, theCompany discussed certain violations of the Amex listing standardsset forth in their notice, but communicated to the Staff why itdisagreed with the Staff's interpretation and understanding ofcertain transactions and attempted to clarify certain issues. TheCompany, through its President, advised the Staff that, to theextent possible, it would attempt to address, clarify and correctthe matters and actions that give rise to the delisting notice.The Company has yet to determine whether any or all correctivemeasures would have a material adverse effect on the Company'sbusiness. The Company recognizes that the Amex Staff has providedno assurances and made no representations concerning what effect,if any, such corrective measures may have on the potential outcomeof the appeal. Additionally, even if the Company corrects allmatters and actions, there is no assurance that the appeal will besuccessful. If the Company's common stock is delisted from Amex,the Company will review its options for listing on anotherexchange or on an automated inter-dealer quotation system (e.g.,Nasdaq), but no assurance can be made that the Company would beable to qualify for relisting its common stock on another exchangeor on an inter-dealer quotation system.

The Amex's January 10, 2005 written notice to the Company providesin substance that the Company is not in compliance with Amexlisting standards, as follows:

1. In the Staff's opinion, the Company's acquisition of a 39.9% minority interest in Penthouse Media Group, Inc., and the financing obtained to complete that acquisition, resulted in the Company being acquired by an unlisted company which triggered the application of the initial listing standards in Sections 101 and 102 of the Company Guide, and the Company does not satisfy such initial listing standards based upon publicly available information;

2. In the Staff's opinion, the Company does not comply with its listing agreement as required by Section 1003(d) of the Company Guide, including the Staff's position that

(i) the Company has issued or authorized its transfer agent to issue additional shares of its common stock without the Amex's approval,

(ii) the Company issued 20% or more of its currently outstanding shares of common stock without obtaining prior approval of its shareholders,

(iii) the Company issued shares to consultants without obtaining prior approval of its shareholders,

(iv) the Company did not obtain appropriate review by its audit committee of related party transactions, and

(v) the Company did not file complete information in response to the Staff's request for additional information;

3. In the Staff's opinion, the Company has engaged in operations contrary to the public interest including the Company's apparent:

(i) selective disclosure of material non-public information in July 2004,

(ii) trading in its securities by insiders while in possession of non-public information in July 2004, and

(iii) engaging in transactions that are not in the economic interest of its shareholders or where there does not appear to have been adequate scrutiny to the terms of its attempted acquisition and termination of Media Billing Company, LLC; 4. The Company is financially impaired, as defined in Section 1003(a)(iv) of the Company Guide, citing, among other things, a working capital deficit of $37,000 as of Sept. 30, 2004; and

5. The Company has made inaccurate representations in SEC filings relating to the number of shares of its common stock outstanding. In the Staff's view, there was a discrepancy in the number of shares outstanding when comparing the Company's reported shares on the Company's Schedule 14A filed on November 1, 2004, and the Company's Form 10-Q for the quarter ending September 30, 2004 and the Transfer Activity Report maintained by the Company's transfer agent.

The Company believes that the Amex Staff may have based certainconclusions addressed in the January 10th notice on incomplete orunclear information and, as a result, may have initiated thedelisting procedures without the benefit of certain facts.However, following the meeting, the Staff advised the Company thatthe only relief available to the Company would be the appealprocess. As noted above, the Company intends to appeal theStaff's determination and request a hearing before the AmexListing Qualifications Panel.

For other information concerning the transaction terms please seedisclosures in IBD's Form 8-K filed with the US Securities andExchange Commission on January 14, 2005.

INTERSTATE BAKERIES: Hires KPMG as Internal Control Advisors------------------------------------------------------------The U.S. Bankruptcy Court for the Western District of Missourigave Interstate Bakeries Corporation and its debtor-affiliatespermission to employ KPMG, LLP, as their internal controladvisors, nunc pro tunc to November 24, 2004.

The firm has diverse experience and extensive knowledge in thefields of internal controls over financial reporting.

KPMG, a United States professional member firm of KPMGInternational, a Swiss cooperative, will render advisory servicesto the Debtors, including assisting the Debtors in:

(1) documenting their internal control over financial reporting in accordance with their responsibilities under Section 404 of the Sarbanes-Oxley Act, including planning and scoping assistance, internal control framework gap analysis, gap analysis comparisons to control reference sources, and remediation assistance;

(2) the design of controls based on the results of documentation and gap analysis; and

(3) performing tests of the design and operating effectiveness of the Debtors' ICOFR in accordance with its responsibilities under Section 404 of SOX.

According to Ronald B. Hutchison, the Debtors' Chief FinancialOfficer, KPMG will be compensated for its advisory services atits normal and customary hourly rates, subject to a "normal-course-of-business" revision every October 1 of each year. Thefirm's current hourly rates are:

KPMG, however, has agreed to apply a 50% discount to its fees,with respect to this engagement.

Mr. Hutchison says that KPMG will also seek reimbursement fornecessary expenses incurred in providing professional services.

Patrick A. Noack, a Certified Public Accountant and a partner atKPMG, assures the Court that the firm:

(a) does not have any connection with the Debtors, their creditors, or any other party in interest, or their attorneys, or accountants;

(b) is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b); and

(c) does not hold or represent an interest adverse to the Debtors, their estates, creditors or other parties-in-interest.

Headquartered in Kansas City, Missouri, Interstate BakeriesCorporation is a wholesale baker and distributor of fresh bakedbread and sweet goods, under various national brand names,including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),Merita(R) and Drake's(R). The Company employs approximately32,000 in 54 bakeries, more than 1,000 distribution centers and1,200 thrift stores throughout the U.S.

KAISER ALUMINUM: Inks Pact to Access $200 Million in New DIP Loan-----------------------------------------------------------------Kaiser Aluminum has signed a commitment letter and filed a motionwith the U.S. Bankruptcy Court for the District of Delawareseeking approval to enter into an agreement with JPMorgan ChaseBank, National Association, J.P. Morgan Securities Inc., and TheCIT Group/Business Credit, Inc., under which Kaiser would beprovided with a replacement for the company's existing Debtor-in-Possession (DIP) Credit Facility and a commitment for a multi-yearexit financing arrangement upon Kaiser's emergence from Chapter11.

J.P. Morgan Securities Inc., would act as the lead arranger, solebookrunner, and syndication agent for the new facility. JPMorganChase Bank would be administrative agent. CIT Group would act asco-arranger.

As described in the motion and the corresponding commitmentletter, and subject to the completion of definitive documentation,the new facility would:

-- replace the existing $200 million DIP credit facility, which expires Feb. 13, 2005, with a new $200 million credit facility intended to remain in place until the company's emergence from Chapter 11;

-- include a commitment, upon Kaiser's emergence from Chapter 11, for exit financing in the form of a $200 million revolving credit facility and a fully drawn term loan of up to $50 million; and

-- provide a maturity on the exit financing's revolving credit facility of five-years from the date of the closing of the replacement DIP (which is expected to occur in February 2005) and a maturity on the term loan of six years from such closing date.

Kaiser has asked the Court to schedule a hearing on the motion onFeb. 2, 2005.

"The new facility has been designed to provide us with the size,terms, and flexibility that we expect to need as we complete ourreorganization and look ahead to our future as a highlycompetitive fabricated products company. The exit financing, inparticular, is expected to enable Kaiser to emerge from Chapter 11with a sound financial profile and the liquidity necessary tosupport continued growth," said Jack A. Hockema, Kaiser'sPresident and Chief Executive Officer.

KARGO CORPORATION: Section 341(a) Meeting Slated for Feb. 7-----------------------------------------------------------The Bankruptcy Administrator for the Eastern District of NorthCarolina will convene a meeting of Kargo Corporation's creditorson Feb. 7, 2005, at 10:00 a.m. at the U.S. BankruptcyAdministrator's Creditors Meeting Room located at Two HannoverSquare, Room 610, Fayetteville Street Mall in Raleigh, NorthCarolina. This is the first meeting of creditors required under11 U.S.C. Sec. 341(a) in all bankruptcy cases.

All creditors are invited, but not required, to attend. ThisMeeting of Creditors offers the one opportunity in a bankruptcyproceeding for creditors to question a responsible office of theDebtor under oath about the company's financial affairs andoperations that would be of interest to the general body ofcreditors.

Headquartered in Raleigh, North Carolina, Kargo Corporation filedfor chapter 11 protection on Jan. 11, 2005 (Bankr. E.D. N.C. CaseNo. 05-00101). James B. Angell, Esq., at Howard, Stallings, From& Hutson, PA, represents the Debtor in its restructuring efforts.When the Debtor filed for protection from its creditors, itestimated assets not more than $50,000 and estimated debts between$10 million and $50 million.

KARGO CORPORATION: Creditors Must File Proofs of Claim by May 9---------------------------------------------------------------The United States Bankruptcy Court for the Eastern District ofNorth Carolina set May 9, 2005, as the deadline for all creditorsowed money by Kargo Corporation on account of claims arising priorto Jan. 11, 2005, to file their proofs of claim.

Creditors must file written proofs of claim on or before the May 9Claims Bar Date and those forms must be delivered to:

The Claims Bar Date applies to all claimants except governmentalunits.

For governmental units, the Claims Bar Date is July 11, 2005.

Headquartered in Raleigh, North Carolina, Kargo Corporation filedfor chapter 11 protection on Jan. 11, 2005 (Bankr. E.D. N.C. CaseNo. 05-00101). James B. Angell, Esq., at Howard, Stallings, From& Hutson, PA, represents the Debtor in its restructuring efforts.When the Debtor filed for protection from its creditors, itestimated assets not more than $50,000 and estimated debts between$10 million and $50 million.

LAIDLAW: Lenders Consent to Laidlaw's Sale of Healthcare Group--------------------------------------------------------------The lenders under the Laidlaw International, Inc., CreditAgreement dated June 19, 2003, among borrowers LaidlawInternational, Laidlaw Transit Ltd., and Greyhound CanadaTransportation Corp., administrative agent Citicorp NorthAmerica, Inc., and the other lenders party to the creditagreement, consent to Laidlaw's disposition of its healthcaregroup, comprised of American Medical Response, Inc., EmCareHoldings, Inc., and each of their direct and indirectsubsidiaries.

Laidlaw will use a portion of the proceeds from the SaleTransaction to repay in full the outstanding principal amount ofthe Term B Revolver and any accrued and unpaid interest.

Laidlaw Senior Vice-President and Chief Financial Officer DouglasA. Carty informs the Securities and Exchange Commission that thelenders have further agreed, in accordance with the terms of abank consent letter, to release:

(a) the guarantees granted by AMR, EmCare and their subsidiaries; and

(b) all liens on all of the assets of AMR, EmCare and their subsidiaries, upon consummation of the Sale Transaction.

A copy of the Bank Consent Letter by and among the Borrowers,Citicorp and the other lenders under the Credit Agreement, isavailable for free at:

As reported in the Troubled Company Reporter on Dec. 8, 2004,Laidlaw International, Inc., entered into definitiveagreements to sell both of its healthcare companies, AmericanMedical Response and EmCare, to Onex Partners LP, an affiliateof Onex Corporation, for $820 million. Net cash proceeds toLaidlaw are expected to be approximately $775 million after debtassumed by the buyer and payment of transaction costs. WhileLaidlaw will realize a substantial gain on sale, there will beno cash tax obligation as a result of the transactions.

Proceeds from the transactions will be used in part to retireapproximately $579 million of outstanding borrowings under thecompany's Term B senior secured term facility.

As reported in the Troubled Company Reporter on Dec. 27, 2004,Moody's Investors Service has placed the long-term debt ratings ofLaidlaw International, Inc., under review for possible upgrade.The review is prompted by the recent announcement by the companythat it had entered into a definitive agreement to sell both ofits healthcare businesses to Onex Partners LP, an affiliate ofOnex Corporation, for $820 million. Net proceeds after fees andassumption of a small amount of debt by the buyer is estimated at$775 million, with a majority of the proceeds intended to be usedto repay substantial levels of Laidlaw's existing debt. Moody'shas also assigned a Speculative Grade Liquidity Rating of SGL-2 toLaidlaw International, Inc. As part of the rating action, Moody'shas reassigned to Laidlaw International, Inc., certain ratings,including the senior implied and senior unsecured issuer ratings,originally assigned at Laidlaw, Inc., in order to reflect moreappropriately the company's current organizational structure.

As reported in the Troubled Company Reporter on Dec. 9, 2004,Standard & Poor's Ratings Services placed its ratings, includingits 'BB' corporate credit rating, on Laidlaw International, Inc.,on CreditWatch with positive implications. The rating actionfollows Laidlaw's announcement that it has entered into definitiveagreements to sell both of its health care companies, AmericanMedical Response and Emcare, to Onex Partners L.P. for$820 million. Laidlaw expects to receive net cash proceeds of$775 million upon closing of the transaction, which is expected bythe end of March 2005. Naperville, Illinois-based Laidlawcurrently has about $1.5 billion of lease-adjusted debt.

Upon regulatory approval, LBP will acquire PEGP from The AnschutzCorporation for $340 million plus deal costs, funded with TLBproceeds and $182 million of cash common equity. Through PEGP,LBP will indirectly own the 2% PPX general partner equity interestand manage and control PPX while LBP will directly own 10.465million of PPX's subordinated limited partner units (a combined36.6% PPX equity interest).

Lehman Brothers Merchant Banking Associates III L.L.C. willprovide all equity funding. While retaining the majority interest,it may later sell a portion of the equity to other investors,including possibly NuCoastal L.L.C. which is owned by Oscar Wyatt.At least initially, PEGP (which manages PPX) will continue to berun by existing management, and two NuCoastal executives willresign from NuCoastal to join PEGP.

(i) approximately $340 million of total PPX debt, $170 million of LBP debt, and $510 million of combined debt;

(ii) $415 million of PPX equity, $182 million of LBP equity, and $597 million of combined equity;

(iii) roughly $90 million of expected PPX 2005 EBITDA and $10 million of PPX maintenance and transitional capital spending; and

(iv) roughly $31 million of LBP/PPX interest expense.

PPX is reasonably positioned to benefit from rising U.S. importsof Canadian syncrude and of foreign crude oil imported through LosAngeles harbor, with the latter enhanced if it sanctions its Pier400 project.

PPX is a master limited partnership engaged in midstreamgathering, blending, pipeline transportation, marketing,terminaling, and storage of crude oil delivered from central andsouthern California, the Rocky Mountains, Canada, and importedthrough the Los Angeles and Long Beach Harbors, and destined forrefineries in Southern California, Salt Lake City, and the greaterRocky Mountain region.

TLB will be first secured by the subordinated equity units butwill not by the PPX general partner interest that would have givenit a direct claim on the general partner interest and operatingcontrol of PPX in the event of LBP bankruptcy. However, TLB willbe first secured by LBP's equity in PEGP which owns the generalpartner interest.

LBP-specific ratings restraints include:

(i) LBP's near total dependence on cash flow from a subordinated equity security;

(ii) resulting structural subordination of LBP cash flow within LBP/PPX, exacerbated by the subordinated units' junior position relative to common units;

(iii) the lack of security in the 2% general partner interest; and

(iv) the fact that private market valuations of subordinated units relative to common units is evolving.

Subordinated units had tended to sell close to common unit valuesbut have moved to greater discounting of subordinated units toreflect their weaker position.

(iv) PPX's regional diversification of the risk of reduced pipeline volumes due to individual refinery downtimes.

TLB is effectively a bullet loan, with 1% mandatory annualamortization and 94% due at maturity. Partial prepayment may comewith a cash flow sweep and possible sale of roughly 25% of thesubordinated units that are scheduled to convert to common unitsin June 2005. Significant PPX distribution growth is needed torepay TLB before maturity, even assuming pre-payment with thesubordinated unit sale proceeds.

In addition, PPX operating company leverage would trigger an eventof default at the LBP level according to the formula: PPX debt toEBITDA may not exceed 4.75:1.0; provided, however, that if, andfor so long as that ratio for LPB itself is 6:00:1.0 or less, themaximum leverage test for PPX would increase to 5.25:1 consistentwith its current credit facilities.

Pro-forma 2005 LBP Debt/Cash Flow, at PPX's current cashdistribution per unit and after interest and LBP expenses, isroughly 15.5x. This risk is reduced if LBP executes its plan tosell up to 25% of its subordinated units to pre-pay debt. Itsshare of distributions would also then fall by just under 25%,after which, LBP Debt/Cash Flow (after LBP interest and expenses)would be in the range of 9x to 10x. Regarding the cash flow andvaluation risk of the subordinated units, this may mitigate overtime as scheduled conversion of the subordinated units to commonunits progresses.

The leveraged acquisition of PEGP adds to PPX's effectiveleverage. Leveraged LBP and its owners have great incentive toguide PPX distribution, growth, and funding strategies in a mannerensuring LBP debt coverage, rising PPX distributions, and a risingPPX split on those distributions to support return goals. PEGPhas less latitude than prior un-leveraged PEGP (held by deeplycapitalized Anschutz) to cut distributions at PPX in the face ofweaker cash flow or capital needs. LBP seeks to accelerate PPXgrowth (in an increasingly expensive midstream acquisition market)to more quickly boost its split (from a current 2% to a maximum of50%) of PPX distribution increases.

Combined LBP/PPX leverage on PPX EBITDA will be high. CombinedEBITDA leverage will start at roughly 5.8x, or 8.2x afterdeducting PPX maintenance capital spending and interest from PPXEBITDA, and in the range of 10x after deducting PPX interest,maintenance capital spending, and LBP interest expense. At theexpected initial PPX cash distribution of $0.50/unit per quarterto common and subordinated units, and the expected payout on theGP interest, LBP would generate in the range of $21.5 million inEBITDA. After expected interest expense in the range of $11million to $12 million, initial interest coverage approximates1.8x to 2x.

TLB is in a very junior position relative to PPX debt and cashflow. LBP's cash flow is generated by PPX cash distributions tosubordinated and general partner units. It is structurallysubordinated to all PPX obligations, further effectivelysubordinated to PPX secured bank debt, and virtually all TLB cashflow is subordinated in rank to the common unit holders' claim toPPX distributions. If facing reduced or stressed cash flow, PPXcan cut distributions to subordinated units yet maintain fullminimum quarterly distribution to common units to support theirmarket value.

Offshore California oil production declines some 7% to 8% per yearwhile onshore production from the San Joaquin Valley declinesroughly 3% per year, restraining PPX cash flow. To organicallysustain or grow cash flow, PPX must offset the impact of theresulting throughput declines in its California gathering andpipeline systems.

However, three offsets to that decline include:

(i) pricing power to raise tariffs on remaining throughput;

(ii) rising throughput and utilization of the Pacific Terminal segment (utilization up to 86% in 2004 from 78% in 2003); and

(iii) PPX's rising Rocky Mountain system throughput.

California declines could also slow if the firms operating theoffshore California Rocky Point play can add significantly to aninitial Rocky Point drilling success. Still, that well is nowproducing at roughly one-half its 2004 initial production rate,indicating steep production declines on any future successes.

PPX's strategy includes the acquisition of regional crude oilgathering and pipeline systems that, ideally, had been run as costcenters within larger marketing, supply, and trading divisions ofmajor oil companies. PPX seeks to then boost throughput by moreaggressively marketing for regional volumes, promotingrationalization of regional flows through its midstreaminfrastructure, and, internally expanding capacity.

With a stable rating outlook, and subject to at least $182 millionof cash common equity funding, Moody's assigned the ratings forLBP:

Pacific Energy Partners is headquartered in Long Beach,California. LB Pacific will be headquartered in New York, NewYork. PPX will continue to pursue growth in the Rocky Mountainsand California as well as in other regions and asset classes.

LNR PROPERTY: Executes Supplemental Indentures---------------------------------------------- LNR Property Corporation (NYSE:LNR) has executed SupplementalIndentures amending the Indentures relating to its 7.625% SeniorSubordinated Notes due 2013 and its 7.25% Senior SubordinatedNotes due 2013. The execution of the Supplemental Indentures wasaccomplished as a result of the receipt of tenders and relatedconsents from the holders of a majority in principal amount ofeach issue of Notes in response to LNR's previously announcedtender offer and consent solicitation.

The Supplemental Indentures amend the Indentures to which theyrelate to eliminate substantially all of the covenants containedin the Indentures other than the covenants to pay principal andinterest when the Notes are due and to offer to holders of theNotes the right to tender their Notes to LNR at 101% of theirprincipal amount after a change of control of LNR (including thepreviously announced merger with a subsidiary of Riley PropertyHoldings LLC), as well as to eliminate certain events of default.

Each of the Supplemental Indentures became effective when it wasexecuted. However, the amendments to an Indenture will not becomeoperative until LNR pays for the Notes which are the subject ofthe Indenture that are properly tendered in response to a tenderoffer and consent solicitation LNR has made and not validlywithdrawn. The tender offer is conditioned on, among otherthings, completion of the merger with a subsidiary of RileyProperty Holdings. If the amendments to an Indenture becomeoperative, they will be effective from the date the relatedSupplemental Indenture was executed.

Because the Supplemental Indentures relating to the two issues ofSenior Subordinated Notes have been executed, Notes of each issuetendered in response to LNR's tender offer can no longer bewithdrawn.

At 5:00 p.m., New York City time, on Jan. 14, 2005, $325 millionprincipal amount of the 7.625% Senior Subordinated Notes (out of atotal of $350 million principal amount) and $390 million principalamount of the 7.25% Senior Subordinated Notes (out of a total of$400 million principal amount) had been properly tendered and notvalidly withdrawn. Tenders of Notes of an issue include consentsto the amendments effected by the Supplemental Indenture relatedto that issue of Notes.

Holders who properly tendered Notes prior to 5:00 p.m., New YorkCity time, on Jan. 14, 2005, and did not validly withdraw them areentitled to receive, in addition to the price being paid for theirNotes, a payment of $30.00 per $1,000 principal amount for theconsents. Notes can still be tendered until the tender offerexpires at 5:00 p.m., New York City time, on Jan. 28, 2005, or anylater date to which it may be extended. However, holders whotender Notes after 5:00 p.m., New York City time, on Jan. 14,2005, will no longer receive payments for consents.

This is not an offer to purchase Notes or a solicitation ofconsents. The offer to purchase and consent solicitation is madesolely by the Offer to Purchase and Consent Solicitation, datedDec. 30, 2004, as modified by an Amendment to Offer to Purchaseand Consent Solicitation, dated Jan. 12, 2005, and a form ofConsent and Letter of Transmittal that accompanied the Offer toPurchase and Consent Solicitation.

The expectation to affirm the servicer rating is based on Fitch'scontinuing discussions with Lennar senior management and theirassertion that the CMBS servicing business will continue tooperate as it currently does. Fitch will continue to monitor theacquisition and its impact on the servicing business.

LONG BEACH: S&P Hacks Two Cert. Classes to B from BBB-----------------------------------------------------Standard & Poor's Ratings Services raised its rating on class II-M1 from Long Beach Mortgage Loan Trust 2002-1. At the same time,ratings on two other classes from two separate deals are lowered,and ratings are affirmed on 120 classes from 17 othertransactions.

The raised rating is based on pool performance that, along withthe shifting interest structure of the transaction, has caused thecredit support percentage to increase sufficiently enough toprotect the class at the new rating level. The projected creditsupport percentage for class IIM-1 from series 2002-1 is 3.30x theloss coverage levels associated with the new rating. Cumulativelosses are 0.72% of the original pool balance, while 90-plus daydelinquencies (including foreclosures and REOs) are 14.83% of thecurrent pool balance.

The lowered ratings are based on pool performance that has led tolosses that have outpaced excess interest for the past six months.Cumulative losses are 4.24% and 4.26% of the original pool balancefor series 2000-1 and 2001-1, respectively. Ninety-plus daydelinquencies (including foreclosures and REOs) are 24.42% and23.11%, respectively, of the current pool balance for series2000-1 and 2001-1. In addition, and despite the poor performance,the step-down triggers on these transactions allowed bothovercollateralization and subordination to step down and furthererode credit enhancement.

The rating affirmations are based on credit support percentagesthat are sufficient to maintain the securities their currentrating levels.

The pools in this shelf use a combination of subordination, excessinterest, and overcollateralization as credit support. Inaddition, series 2002-3 and 2002-4 have bond-insurance policiesprovided by XL Capital Assurance Inc. (financial strength rating'AAA').

Long Beach Mortgage Company either originated or acquired all ofthe mortgage loans used as collateral in these pools in accordancewith its underwriting standards. The underlying collateral forthese transactions are mostly fixed- and adjustable-rate, firstlien, 30-year mortgage loans on single-family homes.

MEDXLINK CORP: Completes Merger with Particle Drilling------------------------------------------------------Particle Drilling Technologies, Inc., a developer of a patentedparticle impact drilling technology for use in oil and gasexploration, and MedXLink Corp., (OTC Bulletin Board:MXLK), havecompleted the previously announced acquisition of PDTI by MedXLinkin a stock-for-stock transaction. The combined company will haveapproximately 22 million fully diluted shares outstanding.MedXLink intends to change its name to Particle DrillingTechnologies Inc. and its stock ticker in the near future.

John D. Schiller, Jr., the chief executive officer of PDTI,stated: "This merger continues to advance the Particle Drillingbusiness plan as we remain focused on final development andcommercialization of our technology. The Particle Drillingtechnology has the potential to reduce the cost of drilling foroil and gas by decreasing the cost and time required to drillthrough difficult formations."

PDTI's patented Particle Impact Drilling system utilizes aspecially designed drill bit fitted with jetting nozzles thatserve to accelerate spherical steel particles ("shot") entrainedwith drilling mud into the path of the drill bit. Each particleis driven into the rock formation at a high velocity and throughmomentum change, delivers forces many times greater than thecompressional strength of the rock, even in formations that existin the subsurface at elevated hardness and stress. The number ofsteel shot strikes on the formation varies with the amount of shotentrained into the mud system. The Particle Impact Drillingsystem is expected to entrain, circulate, and recover steel shotin the mud system without allowing the shot to circulate through arig's pumps. The system is designed as a mobile service that isexpected to be provided to the oil and gas operator as part of thenormal drilling process. The system is expected to result inincreased bit life, longer footage runs and much higher rates ofpenetration, thereby significantly reducing drilling costs andimproving overall economics in the oil and gas drilling industry.PDTI believes its Particle Impact Drilling system has broad marketapplication that will significantly reduce drilling costs in thedrilling market.

Pursuant to the Agreement and Plan of Reorganization, many of theofficers and directors of PDTI will become officers and directorsof MedXLink.

Officers & Directors

-- John D. Schiller, Jr. President and CEO

Mr. Schiller was previously with Devon Energy where he was vicepresident, Exploration & Production with responsibility forDevon's Domestic & International activities. Before joining DevonEnergy he was executive vice president, Exploration & Productionfor Ocean Energy Inc. He was responsible for Oceans' worldwideexploration, production and drilling activities.

Mr. Schiller joined Ocean Energy from Seagull Energy, where heserved as senior vice president of Operations before the twocompanies merged in March of 1999. He joined Seagull Energy fromBurlington Resources, where he served in a variety of operationaland management positions over a period of 14 years, includingProduction and Engineering Manager for the Gulf Coast Division.Prior to this assignment, he managed the corporate acquisitiongroup for Burlington Resources.

Mr. Schiller graduated with honors from Texas A&M University witha Bachelor of Science in petroleum engineering and now serves aschairman of the Texas A&M Petroleum Engineering Industry Board.He is a member of the Society of Petroleum Engineers, AmericanPetroleum Institute, American Association of Drilling Engineersand Board member of the Houston Producers Forum.

-- Ken R. LeSuer Chairman and Independent Director

Ken R. LeSuer retired in 1999 as vice chairman of HalliburtonCompany. Prior to becoming the vice chairman, Mr. LeSuer servedas both the president and CEO of Halliburton Energy Services andas president and chairman of Halliburton Energy Group. He alsoserved as president and CEO of three Halliburton units during histenure. Mr. LeSuer began his career with Halliburton as anengineer-in-training in 1959. From 1965 through 1982, he servedin managerial positions in Asia Pacific and Europe/Africa and wasserving as vice president of Europe/Africa before returning toDuncan, Okla., to assume the position of vice president ofInternational Operations in 1982.

Mr. LeSuer was a member of the Texas A&M University PetroleumEngineering Industry Board, as well as the TAMU Dwight LookCollege of Engineering External Advisory and Development Council.He has served as vice president Services Division of theInternational Association of Drilling Contractors, and is a memberof numerous petroleum and geological engineering societies,including Society of Petroleum Engineers, the American PetroleumInstitute, the National Ocean Industries Association, and thePetroleum Equipment Suppliers Association. Mr. LeSuer receivedhis bachelor's degree in petroleum engineering from Texas A&MUniversity in 1959.

-- J. Chris Boswell, Senior Vice President CFO and Director

Mr. Boswell has over 19 years of experience in financialmanagement focused in the energy industry and began his career atArthur Anderson & Co. and later served in management positionswith Price Waterhouse in Houston. He served as senior vicepresident and chief financial officer of Petroleum Geo-ServicesASA from December 1995 until October 2002. PGS grew from a smallenterprise in 1994 when Mr. Boswell joined the company to a $1billion annual revenue enterprise with a peak enterprise value of$6 billion. Subsequent to Mr. Boswell's departure and following achange of control within PGS, the new management of PGS filed forbankruptcy protection in July 2003 in order to restructure PGS'sdebt portfolio. The restructuring was successfully completed andPGS emerged from bankruptcy in October 2003. In all, during histenure as CFO at PGS, Mr. Boswell financed over $3 billion ofcapital expenditures to fund the Company's growth. Additionallyduring 1995, Mr. Boswell and other senior executives at PGSdeveloped the concept to create a unique oil and gas company usinga non-exclusive license in PGS' seismic data library as seedcapital. This company became Spinnaker Exploration Company(NYSE:SKE) and now has a market capitalization in excess of$1 billion. Mr. Boswell is a 1984 graduate of the University ofTexas at Austin.

Mr. Hardisty has over 20 years of experience in the oil and gasindustry, primarily in the area of land management, contracts andcorporate development, and is co-founder of the Company. FromJanuary 2001 until June 2003, Mr. Hardisty was vice president,Land of Shoreline Partners LLC, an independent exploration companyand from January 2000 until January 2001, vice president, Land ofBenz Resources LLC, a consulting firm charged with managingcertain exploration properties acquired by Harken EnergyCorporation. From May 1999 until January 2000, Mr. Hardisty was aland manager for Texstar Energy Inc. responsible for divestingcertain of the company's exploration projects in the Texas GulfCoast and Mississippi areas. From 1994 until May 1999, Mr.Hardisty was division landman for PetroCorp Inc. responsible forcompany land positions, contract negotiations and partnerrelations in exploration and development projects in PetroCorp'sGulf Coast, Rockies and Canada Division. From 1984 until 1994,Mr. Hardisty was a land consultant and later senior projectmanager for Roger A. Soape Inc. in Houston. Mr. Hardistygraduated from the University of Texas at Austin in 1984 with aBBA in petroleum land management. He is a member of the AmericanAssociation of Drilling Engineers (AADE), the American Associationof Professional Landmen (AAPL) and the Houston Association ofProfessional Landmen (HAPL). Mr. Hardisty recently served as adirector of HAPL and is past chairman of the HAPL Ethics Committeeand past Chairman of HAPL Membership Committee.

-- Gordon Tibbitts Vice President of Technology

Mr. Tibbitts has over 30 years of experience in the upstream oiland gas industry and has 17 years of experience in engineering,research, and development management. Mr. Tibbitts is formerdirector of Research and Development for Hughes ChristensenCompany, one of the largest makers of oil and gas drilling bits.At Hughes Christensen, Mr. Tibbitts was responsible for managingand directing world-wide research, development and technicalsupport through research groups in Houston, Salt Lake City, andTulsa, Okla. He directed and managed the building of a world-class drilling research laboratory in Houston and a drillingoperation in Oklahoma dedicated to field-testing and developmentof downhole tools. Mr. Tibbitts holds over 70 patents related todrilling, coring, and diamond cutting tools. His work has beenpublished by the Society of Petroleum Engineers, InternationalAssociation of Drilling Contractors, Society of Core Analysts, andthe Journal of Petroleum Technology. He graduated from theUniversity of Utah with a Bachelors degree in mechanicalengineering.

-- Prentis B. Tomlinson, Jr. Director

Mr. Tomlinson has over 30 years of experience in the energyindustry, and is a second-generation oil and gas man who traceshis roots back to Tomlinson Geophysical Service, founded in 1937by P.B. Tomlinson, Sr. Mr. Tomlinson has founded a number ofcompanies in the energy sector, including exploration andproduction companies, a crude trading company and another oilfieldservice company, TGS Geophysical Inc., which merged with Nopec in1997 to form TGS Nopec (www.tgsnopec.com) (OSE:TGS). From January1998 until December 1999, Mr. Tomlinson was chairman, presidentand chief executive officer of Benz Energy Inc. and its wholly-owned U.S. subsidiary, Texstar Petroleum Inc. Benz Energy andTexstar Petroleum were exploration and production companies activein Texas and Mississippi. From January 2001 until June 2003, Mr.Tomlinson was president of Shoreline Partners LLC, an independentexploration company and from January 2000 until January 2002,president and director of Benz Resources, L.L.C., a specialpurpose entity established to manage certain exploration assetsowned by Harken Energy Corporation. Subsequent to Mr. Tomlinson'sdeparture, Benz Energy and Texstar Petroleum filed for bankruptcyprotection in late 2000 as a result of a substantial write-down ofreserves at the North Oakvale Dome field in Mississippi in June2000. Mr. Tomlinson received a B.S. and M.S. in geology fromLouisiana Polytechnic Institute, a MTS and MA in religious studiesfrom Harvard University, and he is currently a candidate for aPh.D. in religious studies from Harvard University.

-- Michael S. Mathews Independent Director

Michael Mathews is managing director of Westgate Capital Co., afirm he founded in 1993 to identify and structure investmentopportunities on behalf of private investors. Mr. Mathews servedon the Board of Petroleum Geo-Services (PGS) from 1993 untilSeptember 2002. From 1998 to 2002, he served as vice chairman ofPGS and held the position as chairman of the CompensationCommittee and was a member of the Audit Committee. From 1989 to1992, Mr. Mathews served as managing director of Bradford VenturesLtd., a private investment firm involved in equity investments,including acquisitions. Prior to 1989, he was president of DNCCapital Corporation and senior vice president and director of itsparent, DNC America Banking Corp., the U.S. subsidiary of DenNorske Credit Bank Group, where he directed merchant banking andinvestment activity in North America and founded and acted assenior advisor to Nordic Investors Limited, N.V., a privateventure capital fund. Previously, Mr. Mathews was a vicepresident in Corporate Finance at Smith Barney and prior to thathe was an associate with the New York law firm of White & Case.Mr. Mathews received an A.B. from Princeton University in 1962 andreceived a J.D. from the University of Michigan Law School in1965.

-- Hugh A. Menown Independent Director

Mr. Menown has over 23 years experience in mergers & acquisitions,auditing and managerial finance. Mr. Menown has worked withQuanta Services Inc. (NYSE:PWR) as a consultant or employee invarious capacities since July 1999. Mr. Menown performed duediligence on a number of Quanta's acquisitions and has served aschief financial officer for two of their operating companies, mostrecently North Houston Pole Line, L.P. located in Houston. Priorto working with Quanta, Mr. Menown was a partner in the Houstonoffice of PricewaterhouseCoopers, LLP where he led the TransactionServices Practice providing due diligence, mergers & acquisitionadvisory and strategic consulting to numerous clients in variousindustries. Mr. Menown also worked in the Business AssurancePractice providing audit and related services to clients. Mr.Menown is a Certified Public Accountant.

About Particle Drilling Technologies Inc.

PDTI is a development stage oilfield service and technologycompany owning certain patents and pending patents related to theParticle Impact Drilling technology. The company's technology isexpected to significantly enhance the rate-of-penetration functionin the drilling process, particularly in hard rock drillingenvironments. PDTI intends to develop and exploit this technologyby commercializing the Particle Impact Drilling system and througha unique contracting strategy. PDTI is headquartered in Houston.

NATIONAL ENERGY: Tara Energy Agrees to Pay $750,000 Settlement--------------------------------------------------------------In accordance with the Procedures for Settlement of TradeContracts approved by the U.S. Bankruptcy Court for the Districtof Maryland, NEGT Energy Trading Holdings Corporation andNEGT Energy Trading - Power, LP, entered into a settlementagreement and mutual release with Tara Energy.

Pursuant to the Settlement Agreement, Tara Energy will pay$750,000 to the ET Debtors in full and final satisfaction of allclaims arising out a master power purchase and sale agreementbetween ET Power and Tara Energy, dated August 30, 2002. Eachparty will release the other from any liabilities arising out ofthe August 30 Sale Agreement.

NATIONAL ENERGY: Inks National Grid Companies Settlement Pact-------------------------------------------------------------USGen New England, Inc., asks the U.S. Bankruptcy Court for theDistrict of Maryland to approve its global settlement agreementwith the National Grid Companies:

The Settlement Agreement removes a major obstacle to approval ofUSGen's proposed sales of its fossil and hydroelectric generatingassets, and eliminates what could be protracted litigation in theCourt and before the Federal Energy Regulatory Commission withrespect to the Asset Sales.

John Lucian, Esq., at Blank Rome, LLP, in Baltimore, Maryland,relates that in 1997, USGen Acquisition Corporation, now known asUSGen New England, Inc.; Narragansett Electric Company; and NewEngland Power Company were parties to an asset purchase agreementwherein USGen will purchase, inter alia, substantially all ofNEP's non-nuclear generating assets -- fossil and hydroelectricgenerating stations -- including:

(a) certain related liabilities and obligations;

(b) a portfolio of power contracts with independent power producers; and

(c) supply obligations.

In September 2003, USGen sought to reject its QuebecInterconnection Transfer Agreement with NEP. The partiesthereafter entered into a Stipulation and Consent Order, whichprovided, inter alia, for the rejection of the QITA. Thestipulation also provided for the reservation of NEP's rights tofile a claim arising as a result of the rejection.

In September 2004, USGen filed motions to enter into asset saleagreements with:

(b) the motions were not the functional substitute for the adequate information that an approved disclosure statement would contain;

(c) USGen's proposed assumption and assignment of certain executory contracts was improper; and

(d) the motions made no provision for a determination by the FERC -- or another adjudicatory body with jurisdiction -- that USGen's cessation of performance under its Asset Purchase Agreement and other related agreements was in the public interest.

In connection with the Fossil Sale Motion, USGen and DominionEnergy New England, Inc., and certain affiliated companies fileda joint application with the FERC pursuant to Section 203 of theFederal Power Act for authorization to sell FERC jurisdictionalfacilities associated with the fossil generating assets and thetransfer of the Proposed Assigned Fossil Agreements.

Dominion filed applications with the FERC for a determinationthat certain Dominion affiliates are Exempt Wholesale Generators.National Grid USA responded by filing motions to intervene in theproceeding.

In October 2004, USGen and TransCanada Hydro Northeast, Inc.,filed a joint application with the FERC under Section 203 of theFPA to sell FERC jurisdictional facilities associated with thehydroelectric generating assets.

TransCanada filed applications with the FERC for a determinationthat TransCanada is an Exempt Wholesale Generator. Additionally,TransCanada and USGen filed a joint application for authorizationto transfer the licenses for the hydroelectric generatingfacilities.

In October 2004, USGen filed a motion to extend its exclusiveright to file and solicit a plan of reorganization. The NationalGrid Companies also objected to that request.

National Grid Claims

NEP filed a proof of claim in USGen's Chapter 11 case seeking$10,899,983 in damages, plus contingent and unliquidatedindemnity and other claims. Additionally, Narragansett,Massachusetts Electric, Nantucket Electric, Granite StateElectric, and National Grid USA Service each filed proofs ofclaim against USGen.

According to Mr. Lucian, while USGen disputes the National GridClaims, the total amount of the claims could be as large as$400,000,000.

Proposed Global Settlement

Rather than further litigate the issues in the Court and beforethe FERC, as well as the merits of the National Grid Claims,USGen and the National Grid Companies negotiated a globalsettlement.

The salient terms of the Settlement Agreement and Release are:

(a) The National Grid Companies will have:

* an allowed prepetition unsecured claim equal to or not greater than $195,000,000 -- the National Grid Allowed Claim; and

* an allowed administrative claim for $10,000,000 -- the National Grid Administrative Claim;

* any and all administrative claims, subject to certain exceptions -- the Preserved Claims;

(b) Resolution of Certain Proceedings

National Grid USA and USGen will jointly file with the FERC a conditional notice of withdrawal of their protests and answers filed in FERC Docket Nos. EC05-4-000, EG05-4-000, EG05-5-000, EG05-6-000 and EG05-7-000, pursuant to which final withdrawal will be effective as of approval date of the Settlement Agreement, only after and not later than two business days after each has occurred:

* the Settlement Agreement has been executed;

* a representative of the Official Committee of Unsecured Creditors indicates in writing that the Committee approves or will not oppose the Settlement Agreement; and

* a representative of National Energy & Gas Transmission, Inc., the indirect, ultimate equity holder in USGen, indicates in writing that NEGT approves or will not oppose the Settlement Agreement;

(c) The parties will work cooperatively and in good faith with each other and each of the buyers to facilitate an orderly and timely closing of the Asset Sales; and

(d) Release of Claims

The parties agree to a mutual release of claims and liabilities arising out of any claims the parties have or may have against each other arising before the date a confirmed reorganization plan in USGen's Chapter 11 case becomes effective, except for the Preserved Claims.

A full-text copy of the Global Settlement Agreement and Releaseis available at no charge at:

NORTEL NETWORKS: Gets New Waiver from Export Development Canada---------------------------------------------------------------Nortel Networks Corporation's (NYSE:NT)(TSX:NT) principaloperating subsidiary, Nortel Networks Limited, has obtained a newwaiver from Export Development Canada under the EDC performance-related support facility of certain defaults related to the delayby the Company and NNL in filing their respective 2003 AnnualReports on Form 10-K and Q1, Q2 and Q3 2004 Quarterly Reports onForm 10-Q, in each case with the U.S. Securities and ExchangeCommission, the trustees under the Company's and NNL's public debtindentures and EDC. The waiver also applies to certain additionalbreaches under the EDC Support Facility relating to the delayedfilings and the planned restatements and revisions to NNL's priorfinancial results.

The new waiver from EDC will remain in effect until the earlier ofcertain events including:

-- the date on which all of the Reports have been filed with the SEC; or

-- February 15, 2005.

NNL's prior waiver from EDC, previously announced on Dec. 10,2004, was set to expire on Jan. 15, 2005.

As previously announced, the Company has filed its 2003 AnnualReport on Form 10-K with the SEC and expects that NNL will shortlyfile its 2003 Annual Report on Form 10-K with the SEC. Further,the Company expects that it and NNL will file their respective Q1and Q2 2004 Quarterly Reports on Form 10-Q with the SEC before theend of January 2005, and follow, as soon as practicablethereafter, with the filing of their respective Q3 2004 QuarterlyReports on Form 10-Q. If the Company and NNL fail to file all ofthe Reports by February 15, 2005, EDC will have the right, on suchdate (absent a further waiver in relation to the delayed filingsand the Related Breaches), to terminate the EDC Support Facility,exercise certain rights against collateral or require NNL to cashcollateralize all existing support. If the Company and NNL failto file all of the Reports by Feb. 15, 2005, there can be noassurance that NNL would receive any further waivers or anyextensions of the waiver beyond its scheduled expiry date.

In addition, the Related Breaches will continue beyond the filingof the Reports. Accordingly, EDC will have the right (absent afurther waiver of the Related Breaches) beginning on the earlierof the date upon which the Reports are filed and February 15, 2005to terminate or suspend the EDC Support Facility notwithstandingthe filing of the Reports. While NNL intends to seek a permanentwaiver from EDC in connection with the Related Breaches, there canbe no assurance that NNL will receive a permanent waiver, or anywaiver or as to the terms of any such waiver.

The EDC Support Facility provides up to US$750 million in support,all presently on an uncommitted basis. The US$300 millionrevolving small bond sub-facility of the EDC Support Facility willnot become committed support until all of the Reports are filedwith the SEC and NNL obtains a permanent waiver of the RelatedBreaches. As of January 13, 2005, there was approximatelyUS$291 million of outstanding support utilized under the EDCSupport Facility, approximately US$207 million of which wasoutstanding under the small bond sub-facility.

About the Company

Nortel is a recognized leader in delivering communicationscapabilities that enhance the human experience, ignite and powerglobal commerce, and secure and protect the world's most criticalinformation. Serving both service provider and enterprisecustomers, Nortel delivers innovative technology solutionsencompassing end-to-end broadband, Voice over IP, multimediaservices and applications, and wireless broadband designed to helppeople solve the world's greatest challenges. Nortel doesbusiness in more than 150 countries. For more information, visitNortel on the Web at http://www.nortel.com/

* * *

As reported in the Troubled Company Reporter on Dec. 10, 2004,Standard & Poor's Ratings Services placed its B-/Watch Developingcredit rating on Nortel Networks Lease Pass-Through Trustcertificates series 2001-1 on CreditWatch with negativeimplications.

The rating on the pass-through trust certificates is dependentupon the ratings assigned to Nortel Networks, Ltd., and ZCSpecialty Insurance, Co. This CreditWatch revision follows theDec. 3, 2004, withdrawal of the ratings assigned to ZC SpecialtyInsurance, Co. Previously, the rating had a CreditWatch developingstatus due to the CreditWatch developing status on the ratingassigned to Nortel.

The pass-through trust certificates are collateralized by twonotes that are secured by five single-tenant, office/R&D buildingsthat are leased to Nortel ('B-'). Nortel guarantees the paymentand performance of all obligations of the tenant under the leases.The lease payments do not fully amortize the notes. A surety bondfrom ZC Specialty Insurance Co. insures the balloon amount.

The notes mature in August 2016, at which time a final principalpayment of $74.7 million is due. If this amount is not repaid,the indenture trustee can obtain payment from the surety, providescertain conditions are met.

The notes will remain on CreditWatch while Standard & Poor'sexamines the impact of the withdrawal of the ratings on ZCSpecialty Insurance Co.

OWENS CORNING: Asbestos Claims Estimation Trial Begins------------------------------------------------------Before hearing a word from the parties about their views on theaggregate value of Owens Corning's asbestos-related personalinjury liabilities, District Court Judge Fullam ruled that allpre-trial Motions In Limine and other motions asking the court torestrict or limit testimony or evidence are denied. Judge Fullammakes it clear that his ruling is without prejudice to properobjections being raised during the trial.

TRIAL BEGINS

About 100 showed up on Jan. 13, 2005, the first day of the OwensCorning Estimation Proceeding.

OPENING STATEMENTS

The Asbestos Constituencies Take the Lead

"The concept of estimation is not arcane and is expressly providedfor in the Bankruptcy Code and used by the bankruptcy courts toaddress many different types of contingent and unliquidatedclaims," the Official Committee of Asbestos Claimants and theLegal Representative for Future Claimants told Judge Fullam. Andjust as bank, bond and trade debt is governed by applicablecontract law, personal injury and death claims are governed by theapplicable law of torts.

Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered,representing the Official Committee of Asbestos Claimants,promises to lay out a realistic and scientifically based estimate,pursuant to methodologies adopted and approved in numerous otherbankruptcy proceedings, of the present value (as of October 5,2000) of the Debtors' liabilities for present and future claimsfor personal injury or death resulting from exposure to asbestosand asbestos products for which the Debtors have responsibility.

Mr. Inselbuch started to describe the Banks' position in thisproceeding. Judge Fullam asked him to stop. Judge Fullam askedeveryone to please state their own position about an issue ratherthan attempt to characterize or categorize their opponent's view.

The purpose of making this estimation is to figure out whatpercentage of the value of reorganized Owens Corning must bedelivered to the asbestos constituencies, Mr. Inselbuch explained.To do that, the asbestos constituencies intend to present theCourt with evidence about:

* What the long-standing and well-developed historic resolution values have been for similar asbestos personal injury claims against the Debtors, which will include:

-- what trends existed in these resolutions when Owens Corning filed for chapter 11 protection in 2000;

-- a count of unresolved asbestos personal injury claims on hand at the Petition Date; and

-- an epidemiological and statistical forecast of asbestos personal injury claims that will arise in the future.

* The history of Owens Corning and Fibreboard in the tort system, showing that it defended itself vigorously and settled only cases that its counsel believed involved significant risk -- and did so at values that attempted to minimize costs. The Plan Proponents will offer the testimony of the Debtors' former counsel:

* The basic medical facts related to identification, diagnosis, and effects of asbestos related-diseases. The asbestos constituencies will present:

-- Dr. Laura Welch

* The number and value, by disease distribution, of asbestos personal injury claims pending at the Petition Date and the estimated number of future asbestos personal injury claims that will be filed in the future, measured in accordance with the standards of the tort system and calculated by established and recognized methodologies that have been used in prior bankruptcies, as well as in other contexts. The asbestos constituencies will present:

-- Dr. Mark Peterson and -- Dr. Francine Rabinovitz

* That the net present value of the estimated total future payments to resolve asbestos personal injury liabilities should be based on applying a risk-free rate of return, and the appropriate rates to use for that purpose, as well as for making inflation adjustments. The asbestos constituencies' financial witnesses are:

-- Loretto Tersigni and -- James Hass.

The asbestos constituencies offer this evidence in this legalframework:

I. Estimation: The Governing Legal Standard

A. State law governs the validity and amount of a claim.

B. Asbestos estimation must be based on tort system values.

C. Estimation cannot properly be based on the recovery to which creditors might be limited out of insufficient assets in bankruptcy.

A. Estimation cannot properly be based on a Bank-created "Reformed" Tort System.

B. Evidentiary requirements for product identification can be met by many methods other than the plaintiff's own testimony.

C. Claims for asbestos-related injuries that the bank debt holders regard as "unimpaired" cannot properly be ignored in estimation.

D. If "valid" asbestos personal injury claims were limited to those with virtually uncontestable evidence of medical impairment and exposure to Owens Corning products, the values assigned to claims could not be those applied to a far broader range of claims in the past.

A purchaser of Owens Corning's assets from a chapter 7 trustee,Mr. Inselbuch continued, would obtain none of the benefits of a524(g) trust and would be exposed to successor liability. That isthe position all of the parties in every asbestos-relatedbankruptcy case since Johns-Manville have taken.

Judge Fullam engaged Mr. Inselbuch in a discussion about all thepress concerning payments to unimpaired claimants.

"No," Mr. Inselbuch responded, "that's injury." Impairment is a1/0 ILO reading or lung capacity of 80% or less. Many healthyconstruction workers, Mr. Insulbuch related, used to have perfectchest x-rays and lung capacity in excess of 100%. They breathedin asbestos fibers. Their ILO readings are now 1/0 and their lungcapacity is less than 80%. They continue to work; they areunimpaired; they've been injured; they're entitled to compensationfor that injury.

Mr. Inselbuch commented about the large dollar amounts in OwensCorning's cases. Yes, Mr. Inselbuch says, the numbers are big -- because Owens Corning did a lot of damage when it manufactured,sold and distributed its asbestos-containing Kaylo product. OwensCorning's liability is multiples of the liability faced byArmstrong, Babcock & Wilcox, Eagle-Picher and other asbestosdefendants.

The Debtors Take a Supporting Role

Roger E. Podesta, Esq., at Debevoise & Plimpton LLP, told JudgeFullam that the Debtors are generally in accord with the factualrecitations and much of the argument advanced by the asbestosconstituencies. Owens Corning thinks there's sufficient evidenceavailable to the Court at this juncture to permit a reasonableestimate of present and future liability under Sec. 502(c) of theBankruptcy Code.

Mr. Podesta reminded Judge Fullam that the Debtors asked the Courtto estimate the present value of their asbestos liability on July30, 2004. This estimate is necessary to ultimately meet theasbestos trust fund requirements under Sec. 524(g) of theBankruptcy Code and get their plan of reorganization approvedunder Sec. 1129 of the Bankruptcy Code.

The Debtors intend to call three witnesses:

(1) Clyde Leff -- an in-house lawyer at Owens Corning who served as Lead Counsel-Asbestos Litigation between 1996 and 1998. During that time, he oversaw Owens Corning's defense of asbestos claims and participated in the development of the first National Settlement Program agreements;

(2) Bruce Tucker -- served as one of Owens Corning's principal outside lawyers between 1979 and 1998, during which time he personally tried dozens of asbestos cases to verdicts and negotiated the settlement of many thousands of cases; and

(3) Stephen Snyder -- represented Fibreboard as its National Counsel from 1979 through 2000, and represented Owens Coming from 1985 to 1988 as part of the Asbestos Claims Facility and then again after Fibreboard was acquired by Owens Corning in 1997 through 2000.

Together these individuals have approximately 50 years ofexperience representing Owens Corning and Fibreboard in the tortsystem and are fully conversant with all major strategy decisionsin defense of Owens Corning and Fibreboard over the last twodecades.

Owens Corning also intends to offer the deposition testimony ofMaura Smith, who served as Owens Corning' General Counsel between1998 and 2003 and played a leading role in the development of theNational Settlement Program.

The Debtors intend to put evidence before the Court to make thesepoints:

I. Owens Corning's Experience in the Tort System

A. Owens Corning has an extensive settlement history.

B. Owens Corning tried more cases to verdict than any other defendant.

C. Following the bankruptcy of Johns Manville, Owens Corning became the No. 1 target defendant.

II. Owens Corning's Pre-Petition Litigation Strategy

III. Product Identification and Medical Standards in the Tort System

IV. GAAP Financial Reserves and Bankruptcy Code Estimations are Very Different

Mr. Podesta made it clear that the Debtors are not advocating anyspecific valuation. The Debtors have a deal with a number ofparties. The Debtors need a $16 billion minimum valuation to keepthat deal glued together.

Judge Fullam asked Mr. Podesta if there is any informationavailable about new claims against Owens Corning in the four yearsit's been in bankruptcy.

"No," Mr. Podesta responded, reminding Judge Fullam that theautomatic stay under 11 U.S.C. Sec. 362 has prohibited the filingof any new claims against the Debtors.

Judge Fullam asked Mr. Podesta if there is any informationavailable about what the Debtors were proposing to pay claimantsin the Georgine 23(b)(1)(B) Class Action Settlement rejected bythe U.S. Supreme Court.

"No," Mr. Podesta indicated; the parties never got to the point ofnegotiating recoveries.

Judge Fullam asked Mr. Podesta if there is any informationavailable about what the Debtors thought they'd pay under theNational Settlement Program if they'd obtained near-100%acceptance from the plaintiff's bar.

"No," Mr. Podesta responded.

The Banks

Richard A. Rothman, Esq. at Weil, Gotshal & Manges LLP, told JudgeFullam that he is presiding over a landmark case in which theCourt's decision will set an important precedent regarding thelegal standard that governs estimation of any asbestos defendant-debtor's asbestos-related liability. The Banks tell Judge Fullamthat he will have to decide between moving forward or backward onthe road already taken by other federal courts, including theThird Circuit, as well as state courts and legislatures, tocorrect the problems in the history of asbestos litigation thathave driven over 70 companies into bankruptcy, shortchanged thesmall fraction of asbestos claimants who have actually sufferedserious injury due to asbestos exposure, and constituted a massiveassault on our legal system.

The Banks tell Judge Fullam that the largest dispute in valuecenters on all of the "nonmalignant claims" in which claimantshave no impairment -- 85% of all Tort Claimants. The PlanProponents say that, as a matter of law, Judge Fullam is requiredto give value to those claims by applying substantive state tortlaw as has been done in every other asbestos-related bankruptcycases. The Banks tells Judge Fullam that the asbestosconstituencies are wrong and he should see their case for what itis: vituperative rhetoric, statistical jargon and charts, but nosupporting law.

The Banks outline the case they'll present to Judge Fullam thisway:

I. THE FACTS

A. Owens Corning's pre-petition asbestos history

1. Owens Corning's litigation history

a. Mass consolidations

b. Forum selection

c. Weak medical evidence and punitive damages

d. Screening enterprises

2. The National Settlement Program

a. The Friedman Audits

3. Significant post-petition developments

a. The Friedman Report

b. The Manville Trust

B. The real world as it exists today: federal pleural registries, and state legislative and judicial reforms

II. THE ASBESTOS CLAIMANTS' ESTIMATION IS CONTRARY TO WELL-ESTABLISHED PRINCIPLES OF FEDERAL LAW

A. Overview of the Federal Bankruptcy Law Governing This Proceeding

1. Federal Procedural Law Governs

2. A federal bankruptcy court need not apply state law if doing so would result in the payment of illegitimate claims or frustrate the purposes of the bankruptcy

3. The Court must take steps to ensure that only legitimate claims are allowed and paid

B. The Plan Proponents' Position Is Contrary To The Governing Federal Law

III. THE BANKS EXPERT MAKES APPROPRIATE ADJUSTMENTS, WHILE THE ACC'S AND FUTURES REPRESENTATIVE'S EXPERTS DO NOT

A. The Parties' Estimation Techniques and Estimates

B. Claiming Rates -- Propensity to Sue Must Be Adjusted For Unsustainable Claiming Rates During the NSP Years

E. The Court Should Adopt CSFB'S Discount Rate, Which Reflects the Real World of Asbestos Trusts and Sound Economic Theory, And Reject the Plan Proponents' Attempt to Obtain a Windfall Through An Artificially Low Discount Rate

C. Any Distribution Scheme Should Establish Minimum Criteria for Proof Of Exposure to Owens Corning's Products

The Banks believe it should already be clear to the Court that theAsbestos Claimants have not attempted to meet the task set out bythe Court. They have not provided the Court with an estimate ofthe value of the legitimate present and future asbestos personalinjury claims -- and particularly the nonmalignant claims -- inthe real world in which those claims will now be resolved.Instead, they have estimated only what Owens Corning would havepaid in a make believe world in which the company had never soughtprotection in the federal bankruptcy system and nothing hadchanged between then and now.

The Banks tell Judge Fullam they will demonstrate over the nextseven days that the world has changed dramatically since the1990's, and is continuing to change by the day, as federal andstate courts, as well as legislatures and bankruptcy trusts, takeaction to eliminate or curb the litigation tactics and state courtprocedural practices that grossly inflated the value ofnonmalignant claims in the pre-bankruptcy era. In the face ofthese changes, the Banks contend there can be no serious questionthat, while the pre-bankruptcy claims history may be used asstarting point to estimate the value of future claims, it must beadjusted to take account of the changes that have occurred -- including the important fact that these claims will now beresolved in the federal bankruptcy system under the direction of afederal court. There is also no question that, like other federalcourts, Judge Fullam can put in place procedures that will ensurethat only legitimate claims are paid -- and thereby deter thefiling of a flood of illegitimate claims in the process.

Why are asbestos claimants not determined or valued likecommercial creditors' claims, Judge Fullam queried? Claims aredetermined for commercial creditors as if no bankruptcy filing hadoccurred and their treatment in the bankruptcy flows from what theplan provides. Why are tort claims determined or valueddifferently?

Mr. Rothman responded by stressing that the Banks want to see a"fair valuation of legitimate claims."

Mr. Rothman told Judge Fullam that the pivotal claims in OwensCorning's cases are not the 10% layer of cancer claims. The Banksagree that these sick and dying people must be compensated. Thepivotal claims are the 90% layer of specious claims that shouldn'trecover a dime.

Mr. Rothman gave Judge Fullam a preview of what the Banks'witnesses are prepared to say about how the asbestos litigationlandscape has changed. The most notable change occurred when theManville Trust altered its Trust Distribution Procedures and putrequirements for medical and product identification evidence inplace. The number of new claim filings fell from 88,000 per yearto 11,000 per year. The ratio of nonmalignant to malignant claimsfell from 8:1 to 3:1. Recoveries by truly sick claimants rosefrom 35% to 80%.

"When will I get to hear from the witnesses?" Judge Fullam asked.

Mr. Rothman wrapped up his opening statement.

Martin J. Bienenstock, Esq., at Weil, Gotshal & Manges LLP,cautioned Judge Fullam to avoid being distracted by the asbestosconstituencies' threats that they won't support a plan valuing theasbestos-related liability at anything less than $16 billion. Mr.Bienenstock doesn't believe the asbestos constituencies' scaretactics.

The Five Bondholders

Kenneth Pasquale, Esq., at Stroock & Stroock & Lavan LLP,representing the Five Bondholders holding more than 1/3 of OwensCorning's bond debt, intend to convince the Court that theDebtors' settlement history alone does not tell the true story ofOwens Corning's asbestos liabilities, and that additionalinformation is needed to make a credible estimation. Whenconsideration is given to "claims" against Owens Corning that (i)lack sufficient product identification and (ii) lack evidence ofany medically-cognizable injury caused by exposure to asbestos(let alone caused by exposure to asbestos from an Owens Corningproduct), the only reasonable result is that such claims should bevalued at zero, the Bondholders say.

Debtors' First Witness Clyde Leff

Mr. Podesta called Clyde Leff to the witness stand.

Clyde Leff served as Owens Corning's Lead Counsel for AsbestosLitigation between 1996 and 1998. During that time, he oversawOwens Corning's defense of asbestos claims and participated in thedevelopment of the first National Settlement Program agreements.

Virtually all of Owens Corning's asbestos liabilities arise fromits manufacture and sale of asbestos-containing Kaylo insulation,Mr. Leff explained. Owens Corning began distributing Kayloinsulation manufactured by Owens Illinois in 1953. Owens Corningthen purchased the Kaylo manufacturing business from OwensIllinois in 1958. Owens Corning continued manufacturing asbestoscontaining Kaylo until late 1972, and sold it into 1973.

While most defendants in the asbestos litigation rarely took casesto trial, Mr. Leff relates, Owens Corning was an active trialdefendant. Between 1990 and 1997, Owens Corning went to verdictin more than 1,800 cases, and incurred more than $633 million incompensatory and punitive damage awards.

Mr. Leff provided a summary of the results of the trials in whichOwens Corning was a defendant between 1990 and 1997:

Thus, Owens Corning took some 1,264 non-malignancy cases toverdict, including 328 pleural plaque cases which generallyinvolved unimpaired plaintiffs, and won 55% of the non-malignancycases (including 70% of the pleural cases). But the averageverdict (including defense wins) in non-malignancy cases was$145,696, and the average verdict for pleural cases alone(including defense wins) was $69,181.

Mr. Leff indicates that Owens Corning's aggressive litigationstrategy ended when the company figured out that it would never beable to pay the number of adverse verdicts that were piling up.By 1998, Owens Corning was spending $250,000,000 annuallyprocessing new claims, settling claims, and paying verdicts.

Owens Corning also tried other strategies to reduce its liability.For example, in the course of negotiating certain Mississippisettlements, Owens Corning discovered that pulmonary functiontests designed to provide proof of impairment appeared to havebeen fraudulently prepared. After an investigation, Owens Corningfiled RICO lawsuits against the testing laboratories that hadgenerated the fraudulent test results in nearly 40,000 cases filedin the mid-1990s. At the same time, Owens Corning commissionedits counsel to investigate whether other mass screeners werefraudulently preparing pulmonary function tests, but was unable toidentify any comparable operations.

(ii) a medical diagnosis of an asbestos-related disease (in each case sufficient to survive summary judgment in the particular jurisdiction), and

(iii) a satisfactory release.

Mr. Leff was also personally involved in many large settlements.In substantially all large group settlements, the agreement setforth in detail the required proof of medical and productidentification evidence.

Mr. Leff shared examples of a number of pre- and post-NSPsettlement agreements demonstrating the type of productidentification and medical evidence required in Owens Corning'ssettlements.

In terms of the value of cases that were settled, the single mostimportant factor was the severity of the claimed disease.Mesothelioma cases were the most valuable not only because it is avery painful and inevitably fatal disease, but also becauseasbestos is the only known cause of mesothelioma. Lung cancercases were settled for significantly less because of the existenceof other causes, particularly smoking. Cases involving othertypes of cancer were valued even less than lung cancer casesbecause there was a much weaker epidemiological link betweenasbestos exposure and other cancers.

The value of nonmalignant disease claims varied significantlydepending on the severity of the disease, depending on whether aplaintiff was functionally impaired as a result of the disease.Impairment, particularly for settlement purposes, was typicallymeasured based on the results of pulmonary function tests.Impaired individuals typically received higher payments than thosewho could not demonstrate impairment. But no jurisdiction requiresproof of a particular level of performance on pulmonary functiontests to recover for an asbestos claim.

Owens Corning attempted to negotiate a global class action toresolve its liabilities. Those negotiations collapsed when theThird Circuit, and then the Supreme Court, rejected CCR's classaction settlement as inconsistent with the requirements ofFed.R.Civ.P. 23.

By the late 1990s, Owens Corning recognized that it could nolonger maintain its aggressive trial strategy. It faced asubstantial, growing backlog of claims, a massive backlog ofunpaid verdicts, which were approaching the limits of OwensCorning's bonding capacity, and numerous trial settings around thecountry every month of the year. Owens Corning needed a way to getoff the trial calendars. These conditions led to the developmentof the National Settlement Program.

The NSP, which began in 1998, was an effort to settle, withoutlitigation, and to better manage Owens Corning and Fibreboard'sasbestos liabilities. The NSP eventually involved over 100agreements with 120 plaintiffs' firms across the country, whichresolved not only approximately 90% of all pending cases againstOwens Corning and Fibreboard, but established administrativeprocedures for resolving future claims represented by these firms.

Under these NSP agreements, the plaintiff firm agreed to stronglyrecommend the proposed settlement to their present and futureclients, but each client retained the individual right to acceptthe settlement offer.

This provision where a plaintiff's lawyer agreed to steer futureclaimants into the NSP captured Judge Fullam's attention.

Each agreement included detailed requirements setting forth thetype of medical and product exposure information required beforeOwens Corning or Fibreboard would approve a particular claim forpayment, Mr. Leff explained, getting Judge Fullam back on track.An important feature of the NSP agreements, Mr. Leff continued, isthat they included medical impairment criteria largely derivedfrom the Georgine-CCR settlement to differentiate between impairedand unimpaired nonmalignant cases. Typically, the NSP agreementsincluded provisions that future nonmalignant claims would only bepaid if they met the impairment criteria set forth in theagreement, and approximately two dozen of them drew sharpdistinctions in settlement values between impaired and unimpairednonmalignancies even for pending cases.

The NSP also served to get Owens Corning off the trial dockets,and into the case processing side of a critical mass ofplaintiffs' law firms.

How did Owens Corning's settlement programs and procedures compareto state tort law requirements under which a plaintiff couldobtain a jury trial Mr. Podesta asked Mr. Leff?

Owens Corning's criteria were more rigid, Mr. Leff responded.Plaintiffs in every state were allowed to present their claims toa jury even if they fall short of meeting Owens Corning's NSP andother impairment criteria.

In the tort system, Owens Corning (and other asbestos defendants)tried to address the problem of unimpaired cases by taking themedical weakness of the claims into account during settlementnegotiations.

Judge Fullam asked Mr. Leff if he knew what the Debtors wereproposing to pay claimants in the Georgine 23(b)(1)(B) ClassAction Settlement rejected by the U.S. Supreme Court.

"No," Mr. Leff indicated; the parties never got to the point ofnegotiating recoveries.

Judge Fullam asked Mr. Leff if he knew what the Debtors thoughtthey'd pay under the National Settlement Program if they'dobtained near-100% acceptance from the plaintiff's bar.

Mr. Leff gave a yes-and-no response. Sharing his experiencesettling the Kanawha claims in West Virginia, Mr. Leff relatesthat Owens Corning faced a significant cash-flow challenge as aresult of that settlement but that the average per-claimsettlement amount was lower than average.

Debtors' Second Witness Bruce Tucker

Mr. Podesta called Bruce Tucker to the witness stand.

Mr. Tucker served as one of Owens Corning's principal outsidelawyers between 1979 and 1998, during which time he personallytried dozens of asbestos cases to verdicts and negotiated thesettlement of many thousands of cases.

Mr. Tucker testified that he dealt with scores of plaintiffs' lawfirms during the 1990s, and every single one of them regardedOwens Corning as their principal target. This resulted from thecombination of four factors:

(1) Kaylo was a ubiquitous product. High temperature insulation was used virtually everywhere there were steam or hot water pipes. As shown by thousands of deposition transcripts over a 25 year period, Kaylo was widely used in such facilities as shipyards, paper mills, refineries, glass factories, power plants, steel mills, and auto plants. Moreover, Kaylo had a large share of the high temperature insulation market, second only to Johns Manville. For example, throughout the 1960s, Owens Corning's market share varied between 20% and 40% of the total sales of high temperature insulation each year.

(2) Kaylo, like other pipe and block insulation products, but unlike many other asbestos products such as floor tiles or gaskets, was friable and very dusty. Plaintiffs' experts routinely testified that the cutting and handling of Kaylo generated fiber emissions that regularly exceeded even the pre-OSHA ACGIH threshold limit values of 5 million particles per cubic foot of air. Workers also testified that working with Kaylo generated a snow storm of fibers.

(3) Owens Corning had a damaging set of corporate documents. Owens Corning was perceived by plaintiffs' attorneys as having one of the worst sets of corporate conduct documents, perhaps second only to the infamous Johns Manville and Raymark documents. These corporate documents, in the hands of skilled plaintiffs' counsel, often convinced juries that Owens Corning was aware of the health hazards of asbestos as far back as the early 1940s and took no effective measures to warn workers. Not until 1966 or later, plaintiffs argued, did Owens Corning belatedly place an inadequate label on the packaging of Kaylo. As to other defendants, plaintiffs typically called experts to testify that based on the medical literature at the time of the plaintiffs' exposure, the defendant should have known of the dangers of asbestos. But in Owens Corning's case, because the corporate conduct documents were thought to be so damaging, plaintiffs' counsel often dispensed with expert testimony about the state of the art (which often resulted in concessions on cross-examination) and instead simply tried to prove Owens Corning had actual knowledge of the risks from its own documents and deposition testimony.

(4) Owens Corning was a deep pocket. Plaintiffs viewed Owens Coming as a large and financially successful company that could afford to continue paying substantial sums for asbestos cases. In addition, Owens Corning for many years had substantial insurance resources (now nearly exhausted) to cover asbestos cases.

As a result of these factors, Owens Corning was the prime targetin the asbestos litigation.

On the second day of trial, Mr. Tucker related that Owens Corningtook many asbestos claims to trial and, if a claim survivedsummary judgment, the company generally tried to settle.Typically, Owens Corning required the claimants to provide theCompany with some type of proof of exposure to an Owens Corningproduct over an extended period of time. This proof came from avariety of sources:

Mr. Tucker indicated that Owens Corning created an elaboratedeposition database which it used to cross-reference statementslike "I remember Bob standing next to me when he was cutting Kayloand there were clouds of dust everywhere."

Mr. Tucker related that he spearheaded Owens Corning's so-calledCo-Defendant Project. That project gathered together as muchproduct information and data as the company could find about otherasbestos defendants. That information was used in attempts topush Owens Corning's percentage liability on any particular claimas low as possible.

"I assume you shared that information with the plaintiffs' bar?"Judge Fullam asked.

Mr. Tucker related Owens Corning was a founding member of the ACF.Owens Corning's liability was around 20%. Armstrong's liability,by contrast, was 5%.

Mr. Tucker related that he recalled Babcock & Wilcox as anotherasbestos defendant. Babcock, Mr. Tucker explained, was a non-manufacturer and one of Owens Corning's customers. Babcock'sasbestos-related exposure was lower than Owens Corning's by ordersof magnitude. Mr. Tucker recalls that Babcock paid a flat $300per claim, regardless of the claim's validity. Mr. Tucker recallsthat Babcock tried one case to a verdict -- a $2 million verdictagainst the company.

Mr. Tucker remembers that Dresser was another non-manufacturerasbestos defendant. Dresser's sin was buying Harbison-Walker.Mr. Tucker recalls that Dresser had very limited exposure in theSouthwest region of the United States and that Dresser wasn't aprime litigation target.

"I am," Mr. Tucker said. "Typically, one party offers a documentinto evidence during a trial. The other objects saying that theprejudice of whatever the document says outweighs its probativevalue. The offeror says if the content weren't prejudicial, itwouldn't be offered."

The courtroom erupted in laughter.

"Did Owens Corning ever succeed in having the corporate conductdocuments excluded from a trial under Rule 408?" Mr. Miller asked.

"If that ever happened, the judge should be impeached," JudgeFullam interjected.

Nobody laughed. Mr. Tucker didn't answer. Mr. Miller moved on.

Did the number of "true asbestosis" or "true asbestotic" claimsdecrease over time, Mr. Miller asked?

"Yes," Mr. Tucker responded.

"What's the situation now?" Judge Fullam asked Mr. Tucker.

Mr. Tucker indicated he can only speak about the period from 1970to 1989. During that period, Mr. Tucker said, Owens Corning sawfewer and fewer x-rays over time with 3/3, 3/2, 2/2 and 2/1readings, while more 1/0 ILO readings appeared.

Mr. Snyder represented Fibreboard as its National Counsel from1979 through 2000, and represented Owens Corning from 1985 to 1988as part of the Asbestos Claims Facility and then again afterFibreboard was acquired by Owens Corning in 1997 through 2000.

Fibreboard was an initial founding member of the ACF.Fibreboard's initially paid about 12% of ACF settlements. Thatdecreased to about 10% over time.

Mr. Snyder explains that Fibreboard and Owens Corning were termed"high-dose defendants," meaning that their products and workplacesprovided people with the full range of opportunities for exposureand a broad range of disease claims. Fibreboard and Owens Corningeven face liability on account of bystander claims, Mr. Snyderrelated.

To settle a claim, Fibreboard required every claimant to allegesome asbestos-related disease and demonstrate exposure to aFibreboard product in a sufficient amount over a sufficient amountof time to cause an injury. The threshold was very low.Fibreboard's PAPCO product (almost identical to Kaylo) was a verybad, very dusty product.

Mr. Snyder stepped Judge Fullam through the history of the AhernRule 23(b)(1)(B) class action settlement which fell apart in 1999when the U.S. Supreme Court rejected the Georgine settlement.

"Do you recall any per-case figures from that settlement?" JudgeFullam asked Mr. Tucker.

"I had intimate knowledge of it in 1993," Mr. Snyder quipped.Pressured by Judge Fullam to relate anything he remembers, Mr.Snyder indicated that he thinks he recalls an $11,000 to $12,000average claim settlement amount. He distinctly remembers a$500,000 cap on non-malignant claims, because that was the limitof available insurance proceeds.

Mr. Snyder stepped Judge Fullam through the origins and operationsof the NSP. "For Fibreboard, the NSP was a backup plan if theclass action settlement failed," Mr. Snyder said, "and for OwensCorning, the NSP was a necessity because its litigation strategyhad backfired." The NSP offered plaintiffs "one stop shopping,"Mr. Snyder quipped. Through Integrex, the NSP started in 1999,made a few payments, entered into some settlements, detected andinvestigated some suspected fraud, and stopped work when theDebtors filed for chapter 11 protection.

Nathan D. Finch, Esq., at Caplin & Drysdale, Chartered,representing the Official Committee of Asbestos Claimants, offereddesignations of the deposition of Maura Smith, who served as OwensCorning' General Counsel between 1998 and 2003 and played aleading role in the development of the National SettlementProgram, into evidence.

Ralph I. Miller, Esq., at Weil, Gotshal & Manges LLP, representingthe Banks, indicated that his clients have a small number ofcounter-designations, and don't think many of the Committee'sdesignations are necessary.

Dr. Welch is a physician, board certified in internal medicine andoccupational medicine, licensed to practice in the District ofColumbia and in Maryland. For many years she's had an activemedical practice and treated many workers with asbestos-relateddisorders. Dr. Welch is currently medical director for The CenterTo Protect Workers Rights, a research institute affiliated withthe Building and Construction Trades department of the AFL-CIO.She is the author of over 50 peer-reviewed publications andtechnical reports in the field of occupational and environmentalmedicine, and is currently an investigator on six researchprojects in the field. She's served as a consultant to manyfederal agencies, including OSHA, NIOSH, CDC and the NIH. Dr.Welch has a special interest and experience in health and safetyin the construction industry.

Dr. Welch has worked with several union-management committees onhealth and safety issues, including Boeing-United Auto Workers,and Rail Management and Rail Labor for the US railroad industry.Since 1987 she's worked with the Sheet Metal Occupational HealthInstitute (SMOHIT), a labor-management trust for the unionizedsegment of the sheet metal industry. SMOHIT has sponsored amedical examination program for sheet metal workers in the UnitedStates and Canada, to detect occupational lung disease andasbestos-related disease in particular. She's published severalpapers describing the findings of asbestos-related disease in thisgroup of construction workers, and is now looking at changes inpatterns of disease over time in order to project disease ratesinto the future.

Dr. Welch is intimately involved in the current FAIR Actnegotiations.

Dr. Welch is convinced that exposure to asbestos is the only causeof mesothelioma. There is no other way to contract that deadlyform of lung cancer.

There are several medical diseases that occur as a result ofasbestos exposure, Dr. Welch explained. The ones of greatestconcern and importance are pleural plaques and thickening;asbestosis; lung cancer; colon, laryngeal, pharyngeal cancer; andmesothelioma. For many workers, these diseases are disabling orfatal. For each disease there is a standard set of tests, andgenerally accepted criteria, for diagnosis.

* Pleural Plaques and Thickening

Pleural plaques are also called pleural fibrosis, pleuralthickening, and pleural asbestosis. Most people with heavyexposure to asbestos develop pleural abnormalities. The pleura isa thin lining that surrounds the lung. Asbestos fibers breathedinto the lung are transported to the outside of the lung and causea scar to form in the pleural lining. When these scars reach acertain size they are visible on chest x-ray as a plaque.

Most of these plaques alone do not cause disability, but they dotell us that significant exposure has occurred, and that otherasbestos related diseases may be present. However, some types ofplaques can cause loss of lung function. Scars that involve thecostophrenic angle, the angle between the base of the lung and thediaphragm, can cause loss of lung function, as can extensiveplaques on both sides of the lung.

* Pulmonary Asbestosis

Parenchymal asbestosis is a scar formation in the substance of thelung itself. These scars can interfere with lung function, forthey block the transport of oxygen from the air in the lungs intothe blood vessels that travel through the lungs. Oxygen can onlycross the membranes of the lung if they are thin; asbestosiscauses them to thicken. As a general rule the greater theexposure the more the disease, i.e., there is a dose-responserelationship between exposure and disease. However, some peopleseem to form scars more readily and so we see a variety of diseasefrom the same level of exposure.

These scars are visible on x-ray in most cases but certainly notall cases. High resolution CT scan of the chest can find diseasenot seen on a plain chest x-ray, and is becoming an importantcomponent of the standard practice for the diagnosis ofasbestosis.

The International Labor Organization developed a way of gradingchest x-rays for dust diseases of the lung. The most recentversion is the 1980 Classification of the Radiographic Appearanceof Pneumoconioses (dust diseases of the lung). This system isaccepted around the world. It provides a standard notation, sothat if one reader calls a film a "1/1" another reader will knowwhat the first reader is referring to. The classification uses a12-point scale to define the degree, or severity, of increasedlung markings. Classification of pleural changes (involvement ofthe membrane lining the chest wall and the lung) uses a separatescale, with specific notations made for side of the chest, whetheror not the plaques contain calcium deposits, and the specifictype, length, and width of the thickening of the pleura.

This 12-point scale runs from 0/- to 3/+; a "0" film is normal anda "3" film is the most severe scarring. Each reading on the scaleis characterized by a number between 0 and 3, and a second number,separated by "/". The first number, preceding the "/", is thefinal number assigned to that film by that reader. The secondnumber, following the "/", is a qualifier. The numbers 0, 1, 2,and 3 are the main categories. An x-ray read as a category 1 filmmight be described as 1/0, 1/1, or 1/ 2. When the reader uses1/1, he is rating the film as a 1, and only considered it as a 1film. If he uses 1/0, he is saying is rating the film as a "1",but considered calling it a "0" film before deciding it wascategory 1. Finally, when the reader uses 1/2, he is saying he israting the film as a "1", but did consider calling it a "2" film.In clinical practice, any category "1" film is abnormal; thereforea 1/0 film is consistent with asbestosis.

Even though the ILO system was designed to standardize reading x-rays for asbestosis, studies using the classification in asbestosexposed workers have found readers often disagree aboutclassification of the same x-rays. Using the classification issomewhat of an art. Body size, weight, position of the personduring the x-ray, and x-ray technique affect the amount ofscarring that is visible on an x-ray. If an x-ray is less thanperfect, one reader may think he can be sure scarring is present,while another cannot be sure and grades the film with a lowerscore for scarring.

The "best" readers agree 80% of the time with each other; 20% ofthe time they assign a different score to the same x-ray. If thescarring is extensive, a difference of one grade on the scale isnot important. But if the x-ray shows less extensive scarring, adifference of one grade can be the difference between makingdiagnosis of asbestosis or deciding asbestosis is not present. Forthis reason experts agree that the x-ray alone should not be usedto make a diagnosis of asbestosis; the examining physician shoulduse the occupational and medical history, results of pulmonaryfunction testing, and other medical data to reach a diagnosis.Experts also agree that asbestosis can be present in the lung eventhough the x-ray is normal using the ILO classification system.

Dr. Welch related that she attempted at one point to obtaincertification as a so-called B-reader. She failed the NIOSH-administered test.

Dr. Welch relates that high resolution computed tomography is nowwidely accepted as a diagnostic tool for asbestosis and asbestos-related pleural scarring. HRCT is an excellent technique fordiagnosis of asbestosis and asbestos-related plaque. Recentstudies show that readers using a scoring index were more accurateand reliable in the diagnosis of asbestosis that when using plainchest x-rays. This study concluded that "the examined HRCTscoring method proved to be a simple, reliable, and reproduciblemethod for classifying lung fibrosis and diagnosing asbestosisalso in large populations with occupational disease, and it wouldbe possible to use it as a part of an internationalclassification". Expert consensus supports this conclusion.

Disease from asbestos is also detected on pulmonary functiontesting, and PFTs are used to quantity the level of lungimpairment due to asbestosis. Asbestosis makes the lung stifferand smaller, so the volume of air in the lungs is decreased.Oxygen transport as measured by the diffusion capacity is alsodecreased. Abnormalities are measured using spirometry, lungvolumes, and gas exchange testing. Spirometry is reliable andreproducible when performed according to the specifications set bythe American Thoracic Society. Determination of lung volumes canbe done by the gas dilution method or by body plethysmography;both are standard measures and also are reliable and reproducible.The ATS also sets standards for diffusion capacity, which ensureuniformity among laboratories and reproducibility.

The downside to HRCT is that it's costly, Dr. Welch explains.

Asbestosis can affect each of these tests without necessarilyshowing an abnormality in the other two. Spirometry and totallung capacity both measure lung volume, but one may be abnormalwhile the second remains normal. The diffusion capacity measuresa decrease in oxygen exchange in the lung, and so is measuring adifferent function of the lung than lung volumes. Asbestosis canjust as easily be manifest with a decreased lung volume or adecrease in gas exchange; neither is a better, more sensitive ormore accurate test, and both types of tests must be used in anyset of diagnostic criteria. The diffusion capacity has been shownto correlate with the severity of fibrosis found on pathologicexamination of the lung, and a reduction in diffusion capacity canprecede x-ray changes.

The changes in pulmonary function at times can be subtle, and testresults should be interpreted by someone with experience inasbestos related diseases. Pulmonary exercise testing can be usedto clarify subtle abnormalities, and any compensation system mustallow the examining physician to submit a medical report andrationale based on accepted medical tests. Because the diagnosisof asbestosis or any other asbestos-related disease can be madewith a range of medical tests, it is essential that anycompensation system include a medical panel to review cases thatdo not meet the most common diagnostic criteria. As just oneexample of a study that supports the need for a medical panel,Kipen reported that 18% of insulators who had asbestosis found onpathological examination the lung had a normal chest x-ray. If wewere to require a 1/0 film in all cases of asbestosis, theseworkers would be excluded. Pathological examination is notrequired in the absence of x-ray abnormalities; a combination ofCT scan and exercise testing can reasonably approximate thespecificity as tissue examination.

Once this scar formation takes place it is irreversible. It getsworse in some cases, even after exposure stops. Factors that areassociated with worsening scarring include the severity of disease(the more the scarring, the more likely it is to get worse), andthe amount and intensity of exposure to asbestos. Because of thedamage to the lungs a person with asbestosis is at increased riskof lung infections and so should get regular medical care andinfluenza vaccines.

* Determination of Impairment

Lung function can be measured accurately and reliably withpulmonary function testing. The American Medical Association hasdeveloped guidelines for the evaluation of impairment from manydiseases including lung disease. The AMA Guidelines have beenincorporated into compensation systems in states, and are widelyused by physicians. The diagnosis of asbestosis depends in parton characteristic findings on pathology, chest x-ray or CT scan,but impairment must be measured with pulmonary function testing.

The AMA Guide states that each worker should undergo spirometryand DLCO as part of the evaluation of impairment, and exercisetesting can add additional information if needed. Using acombination of forced vital capacity (FVC), forced expiratoryvolume in one second (FEV1), DLCO, and oxygen consumption onexercise testing (VO2max) the patient is placed into one of fourlevels:

(1) the first level under the AMA has no impairment,

(2) the second level is between the lower limits of normal lung function and 60% of normal;

(3) the third level is less than 60% and more than 50% of normal lung function;

(4) the most severe level is a loss of more than 50% loss of lung function.

The illustration in the AMA Guide for the second level is a goodexample to use here:

Fifty four-year-old retired power plant mechanic with a history of asbestos exposure from age 18-37. He is short of breath when walking on level ground with other people his own age. His chest x-ray shows asbestos-related pleural changes, but no parenchymal asbestosis. His FVC is 64% of predicted, his FEV1/FVC ratio is 81%, and his DLCO is 78%.

This man has asbestos related disease. He has lung impairmentsignificant enough to make him short of breath with normalwalking; in my experience, this degree of impairment would makehim unable to continue in a physically demanding job.

At the highest level using the AMA Guides, where the worker haslost more than 50% of lung function, the worker would be unable toperform activities of daily living, such getting dressed, taking ashower, cooking dinner, or any minimal work around the house.

Not all workers with asbestosis will fit the specific criteria setby legislation; there must be a panel of physicians to reviewmedical exceptions. All claimants with significant illness due toasbestos exposure will not be able to meet the eligibilitycriteria for the compensation categories in any program. Some mayhave died before the required testing could be completed. Othersmay have medical conditions that obscure or complicate theinterpretation of the required testing. Rather than try toestablish diagnostic criteria for each possible set of findings, amore efficient approach would be to establish a medical panel toreview and reach determinations on these cases.

One example of a case that should be reviewed in this way is aworker who has demonstrable impairment but still has test resultsthat are in the normal population range. Comparing anindividual's results on spirometry, lung volumes and diffusion tothe normal range for the population is how we generally determineimpairment. In some cases we know the person's pre-disease lungfunction, and so can compare current testing to his own normaltests from the past. This comparison allows much better precisionin estimating impairment. The AMA Guides explicitly state that"in individuals where the pre-injury or pre-disease values differfrom the population listed values, the examiner may depart fromthe population listed normal values for determining an impairmentrating. . . ."

* Determining That Impairment on PFTs Is Caused By Asbestos

Asbestos scarring of the lung primarily causes a reduction in lungvolume, leading to a reduction in FVC and total lung capacity onpulmonary testing (restrictive disease). Asbestosis also causesreduction in diffusion capacity. Smoking causes a reduction inair flow out of the lung (obstructive disease), and causes anincrease in lung volume. Since the pattern of injury isdifferent, Dr. Welch explains that medical criteria thatdifferentiate asbestos-related diseases from smoking-relateddiseases. The ratio referred to as the FEV1/FVC ratio serves as ameasure of the amount of obstructive lung disease present, and isan objective test that can be incorporated into compensationcriteria. Workers can have both diseases, and those workersshould be compensated for the asbestos-related disease they dohave.

* Lung Cancer and Respiratory Cancers

All major types of lung cancer are caused by asbestos. Lungcancer is incurable in 90% of cases at the time of diagnosis, andthese people usually die within a year. Numerous studies showthat there is a dose-response relationship between exposure toasbestos and the risk of lung cancer, with increasing exposureleading to increasing risk of disease. Workers with asbestosishave a higher risk than other exposed workers, but the asbestosismay simply be a surrogate measure of exposure, for significantasbestos exposure is required to cause asbestosis. Asbestosis isnot a necessary intermediary for development of asbestos relatedlung cancer. Workers with pleural plaque do not appear to be athigher risk for lung cancer than their co-workers with similarexposure who did not develop plaque. Pleural plaque is aconvenient marker of prior exposure to asbestos, and so has beenused as a surrogate for significant occupational exposure inbankruptcy settlement agreements, but the risk of lung cancer isnot restricted to workers with pleural plaques.

The Helsinki Criteria establish an exposure level of 25 fiber-years, or the equivalent exposure using an occupational history,as a level of exposure that significantly increases the risk oflung cancer. Several European countries have established this ora similar level of exposure as the criterion to be used forcompensation of a lung cancer in an asbestos-exposed worker.

Smoking and asbestos act in concert to cause lung cancer, eachmultiplying the risk conferred by the other. In a large study ofasbestos insulation workers in North America, non-smoking asbestosworkers were five times more likely to die from lung cancer,smokers not exposed to asbestos were approximately 10 times morelikely to die from lung cancer, and asbestos workers who smokedwere more than fifty times more likely to die from lung cancer.Asbestos workers who stopped smoking demonstrated a sharp decreasein lung cancer mortality

Although smoking does increase the risk of lung cancer, thiseffect does not detract from the risk of lung cancer attributableto asbestos exposures. Any compensation system must affirm thatwhen a worker has significant exposure to asbestos he is eligiblefor compensation for lung cancer.

The risk of cancer of the pharynx and larynx is also increased byasbestos exposure. Smoking also contributes to the development ofthese diseases, and the risk from asbestos is thought to multiplythe risk from smoking as it does for lung cancer.

* Colon Cancer and Gastrointestinal Cancer

There is also a higher incidence of cancers of thegastrointestinal tract among asbestos workers. In people exposedto asbestos for more than 20 years, the rate of colon cancer isincreased by a factor of 2. It is important for all asbestos-exposed workers to have regular check ups with their doctors, tolook for early signs of colon cancer.

* Mesothelioma

Mesothelioma is a rare cancer of the pleura, the lining of thelung, and the peritoneum, the lining of the abdomen, that occursin persons exposed to asbestos. Mesothelioma can result from alimited exposure to asbestos. All of mesotheliomas in thiscountry are caused by past exposure to asbestos. This cancer isalmost impossible to treat and is usually fatal within 18 monthsof diagnosis.

"Is asbestos a vanished disease?" Mr. Finch asked Dr. Welch.

"No," Dr. Welch responded.

Dr. Welch explained that Drs. Nicholson, Perkel and Selikoff setthe standard on this subject two decades ago at the Mt. SinaiSchool of Medicine. Their analysis estimated that from 1940 to1979, 27.5 million workers were occupationally exposed toasbestos, with 18.8 million of these having high levels ofexposure. Groups at highest risk were insulators, shipyardworkers (many who worked during World War II) and workers engagedin the manufacture of asbestos products. Other high-riskindustries and occupations included other construction trades,railroad engine repair, utility services, stationary engineers,chemical plant and refinery maintenance, automobile maintenanceand marine engine room personnel.

Many of these workers were in the group sometimes referred to asthe "first wave" of asbestos exposed workers - those directlyinvolved in the manufacture or installation of asbestos insulationor products before there were any control measures or standards inplace. Exposures for some of these workers regularly exceeded 20- 40 f/cc, levels that are 200 - 400 times the current OSHAstandard of 0.1 f/cc, with exposures of several months resultingin an increased risk of mesothelioma and lung cancer.

The 1982 Nicholson analysis projected that the occupationalexposures that occurred between 1940 and 1979 would result in8,200 - 9,700 asbestos related cancer deaths annually, peaking in2000, and then declining but remaining substantial for another 3decades. Overall, the Nicholson study projected that nearly500,000 workers would die from asbestos related cancers between1967 and 2030.

Dr. Welch points out that these projections did not includemortality or morbidity from non-malignant asbestos diseases, whichhave or will affect even greater numbers of workers. Nor do theseprojections reflect the full risk of disease among populations whowere exposed in the 1950's and 1960's, but didn't have sufficientlatency for asbestos related diseases to be manifested at the timethe Nicholson study was conducted. This includes many of thebuilding trades and construction workers who not only installedasbestos products, but also were exposed during removal,demolition and renovation. This group is often referred to as the"second wave" of asbestos exposed workers, who account for much ofthe disease that is being manifested today. Similarly, theNicholson study did not address the risk of exposures thatoccurred after 1979. While, OSHA and EPA regulations reducedasbestos exposures in the 1970s, strict regulation of asbestos didnot occur until 1986. Moreover, non-compliance by some employersmeans, even today, that some workers are exposed to levels ofasbestos that place them at increased risk of disease.

Due to the long latency of most asbestos related diseases (30 - 40years or longer), many of the cases of disease that are beingmanifested today are among workers who were first exposed in the1940s, 1950s and 1960s, before asbestos was regulated andcontrolled. It is worth noting that a major portion of theasbestos-related disease that is occurring is among workers whowere exposed while in the military or employed in shipyards doingwork for the government. In fact, review of Manville claims datafor the period of 1995 - 2001 shows that more than 16 percent alllung cancer claims and more than 30 percent of all mesotheliomaclaims came from military personnel and shipyard workers. Thefederal government clearly played a major role in contributing tothe asbestos disease crisis and should bear some responsibility inany asbestos disease compensation program.

Dr. Welch says that Dr. Nicholson's work provides a goodfoundation for estimating the future cases of asbestos disease,and has been utilized in many of the models to develop futureasbestos disease claims projections, including claims projectionsmade by the ARPC for the Manville Trust. However, it is importantto recognize that there is a good deal of uncertainty associatedwith these projections. That uncertainty is reflected in the widerange of future disease projected by Manville and others (rangingfrom a low of 750,000 future claims to a high of 2.6 millionfuture claims) and the fact that past projections have generallyproved to be too low.

"Are there new exposures today?" Judge Fullam queried.

"Yes," Dr. Welch said, but those should be very limited an in veryrare circumstances, like when an asbestos-remediation protocolfails or safe handling procedures are not followed.

"No," Dr. Welch said, because we don't have a national registersystem in place. Cancer deaths are tabulated nationally. Otherdiseases aren't.

Mr. Finch asked Dr. Welch to comment about a recent paper by Dr.Gitlin appearing in Academic Radiology that suggests, based onreviews of x-rays that 95% of claims for asbestos-related diseaseare bogus.

Dr. Welch does not agree with the conclusion and has manyquestions about Dr. Gitlin's study.

"It is not unrealistic to predict that more readers who work forclaimants will find abnormalities and more readers who work forasbestos defendants will find no abnormalities," Dr. Welch said.

"Because consultants try to please clients?" Judge Fullam posited.

"I'm not as cynical as Your Honor," Dr. Welch responded. "I thinkit may be the other way around. Litigants hire experts theyexpect to deliver a certain result."

"Dr. Gitlin's findings don't lead to the conclusion of fraud," Dr.Welch said. A big open question is where did the x-rays come fromthat Dr. Gitlin's B-readers reviewed? She wonders if the sampleDr. Gitlin used was drawn from a group of over-readers and wondersif Dr. Gitlin's readers were classic under-readers. That wouldeasily explain the divergent readings.

Mr. Tersigni is a certified public accountant and certified fraudexaminer with more than 30 years of experience in the practice ofpublic accountancy and financial consulting. During his career,he's been the partner-in-charge of providing audit, tax andmanagement advisory services to a diversified client baseincluding numerous publicly owned manufacturing companies. He wasalso a member of the Technical Standards subcommittee of theProfessional Ethics Division of the American Institute ofCertified Public Accountants. That committee was responsible forreviewing and analyzing practitioners' compliance with generallyaccepted accounting principles and other professional standards.In 2001, he formed and became the principal of L TersigniConsulting P.C., a firm providing financial advisory services inbankruptcy proceedings and complex litigation.

The Official Committee of Asbestos Personal Injury Claimantsretained Mr. Tersigni to provide financial and investment bankingadvisory services. His firm is also currently the financialadvisor to various other asbestos committees involving companiesthat have filed for reorganization under Chapter 11 of the FederalBankruptcy Code.

Mr. Tersigni was asked by counsel to the Committee to render anopinion regarding the appropriate discount rate to calculate thepresent value of Owens Corning's asbestos liability as ofOctober 4, 2000, and October 1, 2004.

He was also asked by counsel to provide an overview of Statementof Financial Accounting Standards No. 5, Accounting forContingencies, and related interpretations, and to render anopinion as to whether contingent asbestos liabilities reported inaudited financial statements prepared in conformity with FAS 5 andrelated authoritative accounting pronouncements means that acompany has determined an accurate estimate of its contingentliability from an economic perspective.

Mr. Tersigni believes a risk-free discount rate should be used tocalculate the present value of Owens Corning's asbestos liability.

As a starting point, Mr. Tersigni explains that he believes it isimportant to draw a distinction between asbestos liabilities andliabilities of a company for borrowed funds. In the case of abank loan or a public bond issuance, for example, a company and acreditor negotiate the terms of the debt instrument, including theinterest rate, the timing of interest and principal payments,covenants and warranties, events of default and remedies upon anevent of default In short, it is a negotiated, arm's-lengthtransaction between two willing parties. To determine the presentvalue of this type of liability at any point in time, one woulddiscount the contractual cash flows (principal and interest) at amarket interest rate (commonly referred to as the market yield)that reflects current market conditions as well as thecreditworthiness of the issuer. This process provides aprospective lender with a rate of return on capital invested.Accordingly, the lender would receive the principal invested plusa rate of return on that principal.

By contrast, asbestos liabilities are involuntary obligations. Anasbestos liability arises not as a result of an arm's-lengthagreement between two willing parties, but rather as a result ofan involuntary illness contracted from exposure to a company'sasbestos-containing products. If the payment of liabilities toinvoluntary asbestos creditors is projected to occur in thefuture, it is necessary to determine an appropriate rate todiscount this obligation to determine its present value to takeinto account the time value of money.

"In my opinion," Mr. Tersigni testified, "the appropriate discountrate is a risk-free rate, i.e., the rate of return on a UnitedStates Treasury obligation with a maturity equal to the number ofyears in the future that the asbestos obligation is assumed to beincurred. Furthermore, in my opinion, the risk-free rate is theappropriate discount rate, whether viewed from the perspective ofthe asbestos claimant or the company that is liable for theasbestos claim."

From the perspective of an asbestos claimant, Mr. Tersigniexplained, an investment in the company was not made. Instead,the asbestos claimant became an involuntary creditor by virtue ofhaving been injured through exposure to the company's asbestosproducts. The asbestos claimant did not receive the protectionsafforded a bank lender or bondholder through a loan agreement orbond indenture. The asbestos claim does not provide any prospectof an economic upside for the claimant as would be the case for astockholder. Nor did the asbestos claimant have the opportunityto assess the risk of entering into a contractual relationshipwith the company. In short, there was no negotiated investment asexists in the typical lender-borrower or stockholder context.Under these circumstances, the reasonable expectation of theasbestos claimant is to be made whole through the damages awarded.In order to make the claimant whole, the claimant could either bepaid the nominal amount in the future or accept a discountedamount currently which could then be invested in a security that,upon maturity, would yield an amount equal to the nominal amountof the asbestos claim. Obviously, it would be prudent to makesuch an investment in a risk-free security to ensure that uponmaturity the nominal amount of the claim would be fully satisfied.This is equivalent to stating that a risk-free rate should be usedto discount the asbestos obligation to its present value.

Mr. Tersigni reaches the same conclusion when viewing the discountrate issue from the perspective of the company. In analyzing theissue as it relates to Owens Corning, Mr. Tersigni first reviewedthe Peterson Report to understand the assumptions and methodologyutilized by Dr. Peterson in projecting the nominal dollar asbestosliabilities of Owens Corning through the year 2041. Dr. Petersonused epidemiological studies and "propensity to sue" analyses toestimate the number and types of future claims to be filed againstOwens Corning. He then assumed that the average settlementamounts that Owens Corning paid with respect to each type of claimduring a base period would continue into the future and provide abasis for calculating nominal asbestos liabilities in futureyears; by doing so, he also incorporated a 2.5% annual inflationfactor beginning in the first year following the base period. Theaverage base period settlement amounts reflect the results ofnegotiations between Owens Corning (or representatives acting onbehalf of Owens Corning) and asbestos claimants. Therefore, thefuture asbestos claims projected by Dr. Peterson implicitlyinclude the impact of future settlement negotiations. The onlyfurther justifiable discounting of these obligations would be totake into account the time value of money. The risk-free rate, asmeasured by the yield on United States Treasury obligations, isthe discount rate that appropriately accounts for the time valueof money, and is therefore the discount rate that should be usedto determine the present value of Owens Corning's future asbestosliabilities.

Mr. Tersigni says the appropriate risk-free rates are:

-- 6.07% as of the date Owens Corning filed for bankruptcy; -- 4.41% as of October 15, 2004; and -- somewhat lower as of today.

"Asbestos liabilities reported in conformity with GAAP are notnecessarily an accurate estimate of a contingent liability from aneconomic perspective," Mr. Tersigni said.

David A. Hickerson, Esq., at Weil, Gotshal & Manges LLP,representing the Banks, asked Mr. Tersigni for what period of timeGAAP projections made by Armstrong and Babcock covered.

"A short period of time . . . a handful of years," Mr. Tersignisaid.

Mr. Hickerson pointed out that Owens Corning's latest Form 10-Qindicates that Owens Corning's estimate is based on a 50-yearprojection from Dr. Vasquez, and suggesting that Owens Corning'sGAAP reporting may be far closer to reality than what othercompanies' disclose in their financial reports.

Alabama Department of Revenue $22,972Sales, Use & Business Tax Division

Ladd Supply Company $22,342

Cowin Equipment Company, Inc. $21,514

Beyel Brothers, Inc. $21,015

Pile Equipment, Inc. $19,796

PARMALAT USA: Asks Court to Extend Exclusive Periods----------------------------------------------------Parmalat USA Corporation and its debtor-affiliates ask the UnitedStates Bankruptcy Court for the Southern District of New York toextend the period during which they have the exclusive right topropose and file Chapter 11 plans to and including March 25, 2005,and the period during which they may solicit acceptances of anyplans filed to and including May 24, 2005.

Marcia L. Goldstein, Esq., at Weil, Gotshal & Manges, LLP, in NewYork, relates that the U.S. Debtors have made significant progresstowards emergence from Chapter 11. Most significantly, theDebtors filed a Plan and accompanying Disclosure Statement withthe support of key creditor constituencies and the OfficialCommittee of Unsecured Creditors. The Court approved the U.S.Debtors' Disclosure Statement on January 14, 2005.

Moreover, the Exclusive Periods have permitted the U.S. Debtors tonegotiate and reach a reasonable agreement with GE Capital PublicFinance, key creditor constituencies, and the Creditors Committeewithout the threat of entertaining competing plans ofreorganization. If the Debtors cannot preserve the exclusiveright to present and file a plan of reorganization, the balancethat has permitted the parties-in-interest to forge reasonableterms for the Debtors' emergence will be lost.

According to Ms. Goldstein, Farmland has been working diligentlyto ensure that it exits Chapter 11 quickly. A key component ofand condition precedent to Farmland's ability to emerge fromChapter 11 under the Plan is obtaining a working capital creditfacility or facilities totaling approximately $100,000,000. Toensure that Farmland will have the required Exit Financing inplace, Farmland sought and obtained the Court's authority to paycertain deposits and fees and expenses for up to three potentiallenders.

Farmland also has taken steps to obtain additional credit tocontinue operating its business through the Effective Date. Tothis end, Farmland sought and obtained the Court's permission toobtain up to $15,000,000 in supplemental postpetition financing.

Farmland continues to maximize the value of its estate through thesale of certain non-core, non-operating properties, and surplusassets. Farmland has already sold three non-operating propertiesand conducted three auctions of surplus assets. Most recently,Farmland entered into a stalking-horse contract, and onDecember 16, 2004, conducted an auction for the sale of a non-operating property in West Caldwell, New Jersey. Farmlandanticipates closing the sale of the West Caldwell Property beforethe end of the year and recovering approximately $2,100,000 forits estate as a result of the sale.

In addition, Farmland has entered into a contract for the sale ofa non-operating property in Atlanta, Georgia, and is finalizing acontract for the sale of a smaller property in Washington,Georgia. Farmland anticipates selling approximately eight othernon-operating properties and conducting at least one additionalauction of surplus assets within the next three months.

PORTOLA PACKAGING: Extends Stock Purchase Offer Until Jan. 31-------------------------------------------------------------Portola Packaging, Inc., has extended its tender offer to purchaseits common stock from the present expiration date of Jan. 15,2005, to Jan. 31, 2005. This will defer acceptance of tendersthrough that date. Also, Portola is reducing the number of sharesit is offering to purchase in the tender offer from a maximum of1,319,663 shares to a maximum of 172,413 shares.

About Portola Packaging, Inc.

Portola Packaging is a leading designer, manufacturer and marketerof tamper evident plastic closures used in dairy, fruit juice,bottled water, sports drinks, institutional food products andother non-carbonated beverage products. The Company also producesa wide variety of plastic bottles for use in the dairy, water andjuice industries, including various high density bottles, as wellas five-gallon polycarbonate water bottles. In addition, theCompany designs, manufactures and markets capping equipment foruse in high speed bottling, filling and packaging productionlines. The Company is also engaged in the manufacture and sale oftooling and molds used in the blow molding industry. For moreinformation about Portola Packaging, visit the Company's web siteat http://www.portpack.com/

To the best of the Debtor's knowledge, Gadsby Hannah is a"disinterested person" as that term is defined in Section 101(14)of the Bankruptcy Code.

Headquartered in Cambridge, Massachusetts, Prints Plus, Inc.,provides printing services. The Company filed for chapter 11protection on Jan. 11, 2005 (Bankr. D. Mass. Case No. 05-10220).When the Debtor filed for protection from its creditors, itestimated assets between $10 million to $50 million and estimateddebts from $1 million to $10 million.

PRINTS PLUS: Turns to Clear Thinking for Financial Advice---------------------------------------------------------Prints Plus, Inc., asks the U.S. Bankruptcy Court for the Districtof Massachusetts for permission to hire Clear Thinking Group, LLC,as its financial advisor during its chapter 11 case.

The Debtor believes that Clear Thinking can offer a uniqueperspective on business opportunities and can take an active rolein implementing plans that are well-suited to Prints Plus' needswhile restructuring its business.

In particular, Clear Thinking will:

a) lead and manage the bankruptcy process on a full-time basis;

b) assist the Debtor in the preparation of its schedules and budgets;

c) assist in the process of seeking to obtain DIP financing;

d) assist the Debtor in every step of the bankruptcy reorganization process, with the goal of obtaining Court approval of a plan of reorganization; and

e) assist the Debtor in any and all other areas as required.

Clear Thinking's professionals will bill the Debtor based on theircurrent hourly rates:

Clear Thinking will also receive a $75,000 "success fee" upon theDebtor's consummation of a plan of reorganization.

Lee A. Diercks, at Clear Thinking, assures the Court of the Firm's"disinterestedness" as that term is defined in Section 101(14) ofthe Bankruptcy Code.

Headquartered in Cambridge, Massachusetts, Prints Plus, Inc.,provides printing services. The Company filed for chapter 11protection on Jan. 11, 2005 (Bankr. D. Mass. Case No. 05-10220).Alex F. Mattera, Esq., and John G. Loughnane, Esq., at GadsbyHannah LLP, represent the Debtor in its restructuring efforts.When the Debtor filed for protection from its creditors, itestimated assets from $10 million to $50 million and estimateddebts between $1 million to $10 million.

PRINTS PLUS: Look for Bankruptcy Schedules by February 25---------------------------------------------------------Prints Plus, Inc., sought and obtained an extension of time untilFeb. 25, 2005, to file its Schedules of Assets and Liabilities,Schedules of Executory Contracts and Unexpired Leases, andStatement of Financial Affairs pursuant to Bankruptcy Rule1007(c).

The U.S. Bankruptcy Court for the District of Massachusettsunderstands that due to the complexity of the Debtor's business,it will need substantial time to collect the necessary informationto accurately and comprehensively complete its Schedules andStatement.

Headquartered in Cambridge, Massachusetts, Prints Plus, Inc.,provides printing services. The Company filed for chapter 11protection on Jan. 11, 2005 (Bankr. D. Mass. Case No. 05-10220).Alex F. Mattera, Esq., and John G. Loughnane, Esq., at GadsbyHannah LLP, represent the Debtor in its restructuring efforts.When the Debtor filed for protection from its creditors, itestimated assets from $10 million to $50 million and estimateddebts between $1 million to $10 million.

RAYOVAC CORP: S&P Puts 'B+' Rating on $1.2 Billion Bank Facility----------------------------------------------------------------Standard & Poor's Ratings Services affirmed its ratings on RayovacCorporation and United Industries Corporation, including both 'B+'corporate credit ratings, which were removed from CreditWatchwhere they had been placed on Jan. 4, 2005.

The outlooks on both Rayovac and United Industries are stable.Upon completion of the transaction, ratings on United Industrieswill be withdrawn.

"The affirmation is based on Rayovac's improved business profiledue to the planned acquisition, which would result in a morediverse and less seasonal product portfolio, and greater scalewith key retailers," said Standard & Poor's credit analyst PatrickJeffery. The acquisition is also expected to significantlyenhance the company's cash flow. "However, the successfulintegration of United Industries into Rayovac's operations will becritical to the company's ability to realize these benefits." Thecompany is also expected to be highly leveraged as a result of theplanned transaction.

Furthermore, the affirmed rating and outlook do not anticipate anyother significant near-term acquisitions that could affectRayovac's ability to integrate United Industries into itsoperations.

RCN CORP: Inks Various Pacts Pursuant to Chapter 11 Plan--------------------------------------------------------On December 21, 2004, RCN Corporation and certain of itssubsidiaries filed with the Secretary of State of the State ofDelaware the Company's Amended and Restated Certificate ofIncorporation and By-Laws.

In accordance with the Plan, the Company:

(i) is issuing new Common Stock, par value $0.01 per share, and new warrants, which will be distributed as soon as practicable subject to certain reserves;

(iii) entered into a First-Lien Credit Agreement, dated as of December 21, 2004, with the Administrative Agent and certain financial institutions parties thereto, as lenders for a new $355,000,000 senior secured credit facility with Deutsche Bank Securities, Inc.; and

(iv) entered into an Amended and Restated Term Loan and Credit Agreement with HSBC Bank USA, National Association, as agent and collateral agent and certain financial institutions parties thereto, as lenders.

The Notes mature on June 21, 2012, subject, in certain instances,to earlier repayment in whole or in part.

On the Effective Date, in connection with the issuance and saleof the Notes, the Company entered into seven agreements:

(i) a Note Purchase Agreement relating to the purchase of the Notes, dated as of December 21 2004, by and among the Company, the Guarantors, and the Purchasers;

(ii) an Indenture governing the Notes, dated as of December 21, 2004, by and among the Company and HSBC Bank USA, National Association, as indenture trustee;

(iii) a Registration Rights Agreement with respect to the Notes, dated as of December 21, 2004, by and among the Company and the Purchasers;

(iv) a Security Agreement, dated as of December 21, 2004, by and among the Company, each Subsidiary Guarantor, and the Second-Lien Collateral Agent;

(v) a Pledge Agreement, dated as of December 21, 2004, by and between the Company and each Subsidiary Guarantor;

(vi) a Subsidiary Guaranty, dated as of December 21, 2004, made by each of the Guarantors; and

(vii) an Intercreditor Agreement, dated as of December 21, 2004, by and between Deutsche Bank Cayman Islands Branch, as administrative agent, and HSBC Bank USA, National Association, as second-lien collateral agent and third- lien collateral agent.

On the Effective Date, in connection with the Credit Facility,RCN entered into four agreements:

(i) the First-Lien Credit Agreement;

(ii) a Security Agreement, dated as of December 21, 2004, with each Subsidiary Guarantor;

(iii) a Pledge Agreement, dated as of December 21, 2004 with each Subsidiary Guarantor; and

(iv) a Subsidiary Guaranty, dated as of December 21, 2004, made by each of the Guarantors in favor of HSBC Bank USA, National Association, as second-lien collateral agent for the benefit of the Secured Creditors.

The First-Lien Credit Agreement provides, among other things, fora seven-year, $330,000,000 term loan credit facility and a five-year $25,000,000 letter of credit facility, subject, in certaininstances, to early repayment in whole or in part.

In connection with the Amended and Restated Evergreen Facility,the Company entered into three agreements:

(i) an Amended and Restated Term Loan and Credit Agreement with HSBC Bank USA, National Association, as agent and collateral agent and certain financial institutions parties thereto, as lenders -- Third-Lien Credit Agreement;

(ii) a Security Agreement, dated as of December 21, 2004, with each Subsidiary Guarantor; and

(iii) a Pledge Agreement, dated as of December 21, 2004, with each Subsidiary Guarantor.

The Third-Lien Credit Agreement provides, among other things, fora seven and three quarter year, approximately $34,430,883 termloan credit facility, subject, in certain instances, to earlyrepayment in whole or in part. There were no proceeds from thiscredit facility because, pursuant to the Plan, it amendsindebtedness that was already outstanding.

A full-text copy of RCN Corp.'s Form 8-K containing the variousagreements is available for free at:

Sankaty, a market value collateralized debt obligation -- CDO -- that closed on Jan. 15, 1998, is managed by Sankaty Advisors,L.L.C. The fund was established to invest in a portfolio ofsenior secured bank loans, high yield bonds, and mezzanine andspecial situation investments.

Since the last rating action on Sept. 5, 2003, the fund has showedsignificant improvement. The overcollateralization -- OC -- testsfor the senior, senior subordinated, and subordinated notes haveincreased to 213.5%, 151%, and 140.3% as of the Dec. 16, 2004,valuation report, from 178.7%, 124.9%, and 115.8% as of theJuly 24, 2003, valuation report. Additionally, the total illiquidassets as a percentage of the market value of the assets hasdecreased from 26.6% to 15%. Several of the illiquid positionshave call options prior to the legal final maturity of Sankaty.

Fitch performed discounted market value analysis at varyingadvance rate stresses and determined that the notes were wellcovered under various discounted collateral scenarios. Afterdiscussing the current state of the portfolio with SankatyAdvisors, Fitch believes the asset manager is managing toward itsDec. 30, 2005, and Jan. 31, 2006, maturity dates. Fitch willcontinue to monitor Sankaty closely to ensure accurate ratings.

Based on the cushion of the OC tests, the credit quality of theportfolio and the track record and experience of Sankaty Advisorsin the high yield loan, mezzanine and special situation assetclasses, Fitch has determined that the ratings assigned to thesenior secured revolving credit facility, the senior securednotes, the senior subordinated secured notes, and the subordinatedsecured notes no longer reflect the current risk to noteholdersand have subsequently improved.

This rating action concludes the review of Select Medicalinitiated on May 12, 2004, and extended on October 20, 2004.Moody's placed the ratings of Select Medical on review after theannouncement by the Centers for Medicare & Medicaid Services (CMS)regarding changes to reimbursement for long term acute carehospitals operating as hospitals within a hospital. The reviewwas extended in October 2004 after the announcement of theproposed leveraged buyout. At the completion of the transaction,Moody's will withdraw the existing ratings of Select Medical.

Moody's assigned the ratings to Select Medical (New):

Proposed senior secured revolving credit facility, rated B1

Proposed senior secured term loan due 2012, rated B1

Proposed senior implied rating, rated B1

Proposed senior unsecured issuer rating, rated B2

Proposed senior subordinated notes, rated B3

The ratings of Select Medical were downgraded and will bewithdrawn upon completion of the refinancing:

Senior implied rating to B1 from Ba3;

Senior unsecured issuer rating to B2 from B1;

$175 million 9.5% senior subordinated notes due 2009 to B3 from B2

$175 million 7.5% senior subordinated notes due 2013 to B3 from B2

The outlook for the ratings of Select Medical and Select Medical(New) are stable.

(i) as the company transitions to the new Medicare reimbursement guidelines for hospital within a hospital long term acute care hospital long term acute care hospitals services;

(ii) the significant leverage the company is incurring in the transaction coupled with the company's already high level of adjusted leverage when operating leases are capitalized to the balance sheet;

(iii) the higher level of capital expenditures projected by Moody's to be used by Select Medical (New) in its long term acute care hospitals transition plan that will reduce free cash flows; and

(iv) the Company's increased acquisition appetite, completing two acquisitions in the last year and a half after several years of no acquisitions.

The ratings also:

(i) reflect the Company's track record of debt reduction and deleveraging, and its commitment to further debt reduction after the transaction;

(ii) Select Medical's history of growing revenues and cash flow from its core LTACH business on a de-novo basis;

(iii) senior management's tenure with Select and their considerable equity participation in the transaction;

(iv) Moody's belief that senior management and new equity sponsor have the track record and experience to guide Select Medical through its transition phase;

(v) strong free cash flows characterized by good operating margins with limited capital expenditure needs and the effects of a positive NOL cash tax shield; and

(vi) the extension of debt maturities from new bank facilities and subordinated notes.

The stable outlook assumes Moody's belief that the company willcontinue to use its free cash flow to reduce debt. Moody'sbelieves that Select Medical needs to deleverage its balance sheetin the near term to provide more financial flexibility as thecompany enters into the LTACH transition period. Further, Moody'sassumes the company will complete no acquisitions in the near tointermediate term. If the company is unsuccessful in deleveragingits balance sheet in the near to intermediate term (12-24 months),Moody's would likely revise the outlook to negative or downgradethe ratings.

If the Company is successful in profitably transitioning its HIHlong term acute care hospitals, resulting in improved free cashflow and the reduction of debt, the ratings would likely beupgraded.

Pro forma for the transaction for the twelve-month period endedSeptember 30, 2004, the company would have had cash flow coverageof debt that is weak to moderate for the B1 category. Adjustedcash flow from operations to adjusted debt would have been 9% andadjusted free cash flow to adjusted debt would have been 7%.Interest coverage of debt, defined as EBIT to interest, would havebeen weak at 1.7 times.

Leverage would have been high at 6.2 times adjusted debt toEBITDAR. For purposes of calculating adjusted debt, Moody's hascapitalized operating leases 8 times for long term acute carehospitals related leases and 3 times for equipment related leases.This leverage multiple assumes all operating leases arecapitalized at an 8 times multiple.

Moody's believes that the use of EBITDA and related EBITDA ratiosas a single measure of cash flow without consideration of otherfactors can be misleading. Moody's believes that liquidity shouldbe good following the transaction. Select Medical (New) isexpected to rely heavily on its new revolving credit facility andis expected to have sufficient availability for working capitaland general corporate purposes, prior to any repayment on therevolver.

Moody's anticipates that Select Medical (New) should generate freecash flow that will allow it to repay a portion of its revolvingcredit facility, thus generating excess liquidity through the nexttwelve months. Moreover, we anticipate Select Medical (New) willgenerate cash flow that will cover all capital expenditure needsother than extraordinary capital requirements. These capitalexpenditure requirements include amounts Moody's believes SelectMedical (New) will need to spend to meet the goals of thecompany's transition plans. In addition, Moody's expects thecompany will remain in compliance with proposed financialcovenants for the next twelve months.

The B1 ratings for the proposed senior secured credit facilitiesare rated at the senior implied level to reflect the fact that thecredit facilities will likely represent more than half of the proforma debt capital structure.

The B3 rating for the proposed senior subordinated bonds are ratedtwo notches below the senior implied rating because of theircontractual subordination to the significant level of seniorsecured debt. Moody's expects the subordinated notes will beunsecured, but guaranteed by operating subsidiaries. The ratingsare subject to Moody's final review of documentation for thetransaction.

Select Medical is a leading operator of specialty hospitals in theUnited States. Including the SemperCare acquisition completed onJanuary 1, 2005, Select Medical operates 99 long-term acute carehospitals in 26 states. It operates four acute care medicalrehabilitation hospitals in New Jersey and is a leading operatorof outpatient rehabilitation clinics in the United States andCanada, with approximately 750 locations. Select Medical alsoprovides medical rehabilitation services on a contracted basis atnursing homes, hospitals, assisted living and senior care centers,schools, and worksites. For the nine months ended September 30,2004, Select Medical reported total revenues of $1.24 billion.

SI INT'L: Moody's Assigns B1 Rating to Revolving Credit Facility----------------------------------------------------------------Moody's Investors Service assigned a B1 rating to the proposed$100 million revolving credit facility and $50 million term loanfacility of SI International, Inc. In addition, Moody's assigneda senior implied rating of B1 and an SGL rating of SGL-2.Proceeds from the $100 million term loan are expected to be usedto acquire Shenandoah Electronic Intelligence, Inc. forapproximately $75 million in cash, refinance existing indebtednessand pay fees and expenses. The revolver is expected to be unusedat closing.

The first time ratings assigned by Moody's:

-- $50 million Senior Secured Revolving Credit Facility, rated B1;

-- $100 million Senior Secured Term Loan Facility, rated B1;

-- Senior Implied, rated B1;

-- Senior Unsecured Issuer Rating, rated B2;

-- Speculative Grade Liquidity Rating, rated SGL-2.

The ratings outlook is stable. The ratings are subject to thereview of the final executed documents.

The ratings reflect:

(i) risks related to the Company's rapid growth through acquisitions in 2004 and 2005;

(ii) the Company's exposure to potential changes in government spending policies;

(iii) significant contract re-competes in the next two years;

(iv) the Company's small revenue base (pro forma revenues of about $320 million for the nine month period ended September 30, 2004) and limited financial resources compared to its larger industry competitors; and

(v) strong competition in the Company's markets which may intensify due to the entrance of new or larger competitors, including those formed through consolidation, who have greater financial resources, larger client bases, and greater name recognition.

(iv) significant contract backlog in relation to revenues (total backlog at September 30, 2004 was $884 million of which $142 million was funded); and

(v) the continuing trend toward outsourcing of work by government agencies and good liquidity.

Although the total backlog amounts are significant, there is noguarantee that these revenues will materialize.

In addition to the prospective acquisition of ShenandoahElectronic, SI International purchased Bridge TechnologyCorporation for $30 million in December 2004 and MATCOMInternational Corporation for about $66 million in January 2004.These acquired businesses represent a large portion of theearnings and cash flow of SI International and will have a shortoperating history under company management. Potential risksinclude the loss of key employees, changes in businessrelationships with key customers and potential costs anddisruptions due to the integration of operations.

The assignment of the SGL-2 speculative grade liquidity ratingreflects the company's good liquidity profile and Moody'sexpectation of stable free cash flows from operations, significantprojected availability under the $50 million revolving creditfacility and adequate cushion under bank covenants. Cash on handand cash flow from operations are expected to cover ongoing cashneeds for the next twelve months, which primarily consist ofcapital expenditures, required term loan amortization and anexcess cash flow sweep pursuant to the terms of the proposedsecured credit facility.

SI International is expected to have about $3 million of cash uponcompletion of the Shenandoah Electronic acquisition and Moody'sexpects SI International to generate about $9 million in free cashflow from operations in 2005. Absent an acquisition, Moody'sexpects limited, if any, borrowings under the revolving creditfacility. Although financial covenant levels under the proposedrevolving credit facility have not been finalized, Moody's expectsSI International to have adequate cushion against the covenantsover the next twelve months.

The stable ratings outlook reflects the expected growth in thegovernment information technology budget and the belief that SIInternational is competitively positioned to benefit from thisgrowth. Moody's expects SI International to grow its revenues,improve operating margins and utilize free cash flows to reduceborrowings under its secured credit facility. The ratings oroutlook could be pressured if the government's spending prioritiesshift and cause the termination of any large contracts, if thecompany is unable to win a significant portion of re-competes forits large contracts or SI International is unable to winsufficient new business to grow its revenue base.

The ratings or outlook could also be pressured by a significantincrease in leverage due to another large acquisition. The ratingsor outlook could be positively impacted if the company improvesfree cash flow through stronger than expected revenue growth orimproved margins.

The $150 million in senior credit facilities will be secured bysubstantially all the assets of SI International including afirst-priority pledge on 100% of the capital stock of domesticsubsidiaries. An unconditional guarantee from all materialsubsidiaries supports the credit facility.

SI International's credit metrics are strong within its ratingcategory. Debt to total book capitalization is expected to beabout 41% upon the closing of the transaction. Pro forma for theacquisition of Bridge and Shenandoah, free cash flow to total debtis expected to be about 9% in 2005. Pro forma debt to EBITDA isexpected to be about 2.7 times in 2004 and 2.4 times in 2005. Proforma EBITDA to interest is expected to be about 4.3 times in 2004and 5.3 times in 2005.

Headquartered in Reston, Virginia, SI International, Inc. is aprovider of information technology and network solutions with theFederal Government as a major client. SI International's revenuesfor 2003 and the first nine months of 2004, on a pro forma basisfor the acquisitions of Matcom, Bridge and Shenandoah, were about$323 million and $320 million, respectively.

At the same time, Standard & Poor's assigned its 'B+' seniorsecured debt rating, with a recovery rating of '3', to SI'sproposed $150 million senior secured bank facility, which willconsist of a $50 million revolving credit facility -- due 2010 --and a $100 million term loan -- due 2011.

The senior secured bank loan rating, which is the same as thecorporate credit rating, along with the recovery rating, reflectStandard & Poor's expectation of meaningful (50% to 80%) recoveryof principal by lenders in the event of a default or bankruptcy.The proceeds from this facility, along with cash from the balancesheet, will be used to finance the acquisition of ShenandoahElectronic Intelligence Inc. -- SEI -- and to refinance existingdebt.

The outlook is positive.

"The ratings reflect SI's relatively modest position in the highlycompetitive and consolidating government IT services market,dependence on the federal government's spending initiatives, andacquisitive growth strategy," said Standard & Poor's creditanalyst Ben Bubeck. A predictable revenue stream, based uponlong-term contracts and the expectation that government-relatedservices business will remain solid over the intermediateterm, are partial offsets to these factors.

SI provides IT services and communications solutions almostexclusively to the federal government. The Department of Defenseis the company's largest customer, accounting for more than 50% ofSI's revenue during the nine months ended September 2004. Proforma for the proposed credit facility, SI had approximately$148 million in operating lease-adjusted debt as of December 2004.

TECO ENERGY: Discloses Final Settlement Rate for Equity Units-------------------------------------------------------------TECO Energy, Inc. (NYSE: TE) disclosed the final settlement ratefor its remaining outstanding 7,208,927 equity security units(NYSE: TE-PRU) that were not tendered in the early settlementoffer completed in August 2004. Each unit holder will receive0.9509 shares of TECO Energy common stock per unit and cash inlieu of fractional shares. The rate is based on the averagetrading price of TECO Energy common stock for the 20 consecutivetrading days ending Jan. 12, 2005, as required under the terms ofthe units. The average price for the period was $15.21.

As a result, on Jan. 18, 2005, each holder of the TECO Energyunits will purchase from TECO Energy 0.9509 shares of TECO Energycommon stock per unit for $25.00 per share, although not requiredto make any additional cash payment. The cash for the unitholders' purchase obligation will be satisfied from the proceedsreceived upon the maturity of a portfolio of U.S. Treasurysecurities acquired in connection with the October 2004remarketing of the trust preferred securities of TECO CapitalTrust II that formerly were part of the units. This will resultin TECO Energy issuing approximately 6.85 million shares of commonstock and receiving approximately $180 million of proceeds fromthe settlement.

As a result of the final settlement of the purchase contractcomponent of the units, the units will cease to be traded on theNew York Stock Exchange before the opening of the market today,Jan. 18, 2005.

On Jan. 18, 2005, unit holders of record as of Jan. 14, 2005, willreceive the final regular quarterly cash distribution ofapproximately $0.59 per unit.

The Bank of New York is acting as purchase contract agent for thefinal settlement. Questions regarding the exchange should bedirected to Barbara Bevelaqua at (212) 815-5091.

As reported in the Troubled Company Reporter on Jan. 10, 2005,Fitch Ratings does not expect any changes to the current ratingsor Outlook for TECO Energy following their announcement earliertoday that they plan to record impairment charges of $480 million(after-tax) in the fourth quarter of 2004 related to the Dell,McAdams, and Commonwealth Chesapeake power plants, as well as someremaining unused steam turbines. The charges come as a result ofannual reviews of the carrying values of the assets and willaffect both net income and the balance sheet. Fitch rates TECO:

TRANSTECHNOLOGY: To Trade on OTCBB After NYSE Delisting Reaffirmed------------------------------------------------------------------TransTechnology Corporation (NYSE: TT) has received notificationfrom the New York Stock Exchange that an NYSE Board Committee hasreaffirmed the previously announced staff decision to delist thecompany's shares of common stock at an appeal hearing held onJanuary 5, 2005. The company has taken steps to ensure that itsshares will trade on the Over-the-Counter Bulletin Board and willmake a follow-up announcement regarding the Company's new symbolonce determined by the OTCBB.

Robert White, the company's president and CEO stated, "While weare disappointed by the decision of the NYSE, we have alreadyidentified a market maker to facilitate the trading of our shareson the OTCBB. We believe that trading of our shares on the OTCBBwill provide an efficient mechanism for our shareholders.Further, we will continue to complete all required SEC filings anddisclosures, and we will continue to communicate with ourinvestors as a public company."

The OTCBB -- http://www.otcbb.com/-- is a regulated quotation service that displays real-time quotes, last sale prices andvolume information in over-the-counter securities. An OTC equitysecurity is generally one not listed on the NYSE or any othernational securities exchange. Quotations and trading informationfor securities quoted through the OTCBB can be accessed viabusiness news and financial websites and through securitiesbrokers.

Trading in the company's shares on the NYSE will be suspended atthe close of the trading day on January 20, 2005. The NYSE hasindicated that it may, at any time, suspend a security if itbelieves that continued dealings in the security on the NYSE arenot advisable.

About the Company

TransTechnology Corporation -- http://www.transtechnology.com/-- operating as Breeze-Eastern -- http://www.breeze-eastern.com/-- is the world's leading designer and manufacturer of sophisticatedlifting devices for military and civilian aircraft, includingrescue hoists, cargo hooks, and weapons-lifting systems. Thecompany, which employs approximately 180 people at its facility inUnion, New Jersey, reported sales from continuing operations of$64.6 million in the fiscal year ended March 31, 2004.

UAL CORPORATION: Court Issues TRO Enjoining U.S. Bank, RAIC & LA---------------------------------------------------------------- As reported in the Troubled Company Reporter on Dec. 22, 2004, UALCorporation and its debtor-affiliates asked the U.S. BankruptcyCourt for the Northern District of Illinois for a temporaryrestraining order or preliminary injunction enjoining U.S. Bank,the City of Los Angeles and the Regional Airports ImprovementCorporation from enforcing any remedies under the Lease Agreementsand Bond Agreements.

Debtors Ask for Summary Judgment

Pursuant to Rule 7056 of the Federal Rules of BankruptcyProcedure, the Debtors ask for summary judgment that:

a) the Bond Agreements constitute "disguised financing" arrangements rather than true leases, and are not subject to Section 365 of the Bankruptcy Code; and

b) the Bond Agreements are independent from the Lease Agreement that governs the Debtors' use and occupancy of terminal facilities at LAX.

James H.M. Sprayregen, Esq., at Kirkland & Ellis, says that whendeciding whether an agreement represents a "true lease," theCourt should apply five factors:

1) Whether the rent was calculated to compensate for use of the land or for another purpose, such as ensuring a rate of return on an investment;

2) Whether the purchase price was related to fair market value of the land;

3) Whether the property was purchased by the lessor for the lessee's use;

4) Whether the transactions was called a lease to gain certain advantages, like tax treatment; and

5) Whether the lessee assumed many of the obligations normally reserved for the lessor.

Based on the this criteria, Mr. Sprayregen asserts that the BondAgreements are clearly "disguised" financing arrangements, towhich Section 365 does not apply. The Debtors' rent wascalculated to ensure interest and principal payments on theBonds, not for use of the LAX facilities. The LAX Subleaserental payments were calculated based on the amount necessary tofinance LAX projects, not fair market value of the land. TheBonds were issued to finance the LAX Projects for the Debtors'sole benefit, with no benefit to the Bonds' Trustees. The Bondswere stylized as "leases" to avoid certain constitutional debtlimitations to obtain tax-exempt municipal bond financial rates.Unlike a true lessee, the Debtors have taken on many of theburdens that are usually borne by the lessor, namely paying costoverruns, assuming liability for construction contracts, payingtaxes, providing insurance and making repairs and maintenance.

Mr. Sprayregen assures the Court that the Agreements cannot beintegrated with the true leases at LAX. The nature and purposeof the Bond Agreements are distinct from that of the LAX TerminalLease. The consideration paid under the Agreements is allocablebetween the debt service on the Bonds and the rental payments forleased premises. Last, the Agreements are not interrelated inany way.

* * *

Judge Wedoff issues a temporary restraining order enjoining U.S.Bank, the City of Los Angeles and the Regional AirportsImprovement Corporation from enforcing any remedies under theLease Agreements and Bond Agreements.

UAL CORP: Retired Pilots Want Sec. 1113 Representative Appointed----------------------------------------------------------------The Air Line Pilots Association refused to represent its retireesin the Section 1113 process in UAL Corporation and its debtor-affiliates' bankruptcy cases. In response, the United RetiredPilots Benefit Protection Association, an Illinois not-for-profitcorporation representing 3,089 retired United Air Lines Pilots,asked the U.S. Bankruptcy Court for the Northern District ofIllinois to appoint an authorized Section 1113 representative todefend its members' rights to receive vested pension benefits.The URPBPA also wanted to participate in the Section 1113(c)hearing. Judge Wedoff, however, denied the URPBPA's requests.

Consequently, the URPBPA advises the Bankruptcy Court that itwill appeal Judge Wedoff's Order to the United States DistrictCourt for the Northern District of Illinois. In the appeal, theURPBPA wants:

a) the Bankruptcy Court's Order denying its request reversed;

b) its request for appointment of a Section 1113 representative granted;

c) the bargaining process between the Debtors and the URPBPA's authorized representative to commence; and

d) any agreement that impacts the retired pilots between the Debtors and Air Line Pilots Association to be declared null and void.

Frank Cummings, Esq., at LeBoeuf, Lamb, Greene & MacRae, inWashington, D.C., explains that the appointment of a Section 1113representative would allow the retired pilots to bargain with theDebtors on their rights to receive their pension benefits.

Mr. Cummings points out that Section 1113 requires a debtor tomake a proposal to an authorized representative before rejectinga collective bargaining agreement. The Debtors must comply withthis provision before modifying the retired pilots' right toreceive their pension benefits. Since the retired pilots have noSection 1113 representative, they are being denied their right tobargain with the Debtors.

UNITED REFINING: Earns $4.2 Million of Net Income in First Quarter------------------------------------------------------------------United Refining Company, a leading regional refiner and marketerof petroleum products, reports that net sales for the three monthsended November 30, 2004, were $426.1 million, an increase of $95.3million, or 28.8% over the November 30, 2003, net sales of $330.8million. The increase in net sales for the first quarter offiscal year 2005 resulted from a 19.5% increase in retail salesand a 40.2% increase in wholesale sales. Operating income for thethree months ended November 30, 2004 was $13.1 million, matchingthe $13.1 million operating income over the three months endedNovember 30, 2003. Net Income for the first quarter of fiscal2005 was $4.2 million, $.2 million less than first quarter 2004,due mainly to increased interest expense.

Earnings before interest, taxes, depreciation and amortization(EBITDA) for the three months ended November 30, 2004, was$17.1 million compared to $16.8 million as of November 30, 2003.United Refining Company uses the term EBITDA or Earnings BeforeInterest, Income Taxes, Depreciation and Amortization, which is aterm not defined under United States Generally Accepted AccountingPrinciples. The Company uses this term because it is a widelyaccepted financial indicator utilized to analyze and comparecompanies on the basis of operating performance and is used tocalculate certain debt covenant ratios included in several of theCompany's debt agreements.

United Refining Company -- http://www.urc.com/-- is an independent refiner and marketer of petroleum products. It fuelscars, trucks, airplanes and farm and construction equipment, aswell as the homes and industries in one of America's largestconcentrations of people and commerce. Their market includesPennsylvania and portions of New York and Ohio.

* * *

As reported in the Troubled Company Reporter on July 27, 2004,Standard & Poor's Ratings Services assigned its 'B-' rating toUnited Refining Company's $200 million senior notes due 2014.

The rating outlook is stable. At the same time, Standard &Poor's assigned its 'B-' rating to the company's proposed$140 million senior secured second-lien notes due 2011.

The notes are rated one notch lower than the corporate creditrating due to the amount of priority debt in the capitalstructure. Proceeds from the notes and a credit facility will beused to partly fund the acquisition of Uno Chicago Grill by CentrePartners, a private equity firm. Pro forma for the transaction,the company will have about $158 million of funded debtoutstanding. The ratings are based on preliminary terms andconditions, and are subject to review once final documentation isreceived.

Beginning in 1994, Uno has taken steps to reposition itself as asuburban casual dining restaurant from an urban pizzeria, but hasretained its signature deep-dish pizza, which is its point ofdifferentiation among other casual dining concepts. Over the lastfew years, the company retrofitted its kitchens and broadened themenu by introducing non-pizza items, which have increased as apercentage of total sales, resulting in a more balanced mix ofgross profit dollars and margins.

However, Uno remains a small player in the casual diningrestaurant industry and is regionally concentrated, with about 50%of company-owned restaurants located in either Massachusetts orNew York. Other core markets include the suburban shoppingcenters and regional mall areas of the Baltimore/Washington D.C.area and Chicago.

US AIRWAYS: Court Approves IAM Collective Bargaining Pact---------------------------------------------------------On November 2 and 3, 2004, US Airways and its debtor-affiliatesdelivered their Section 1114 Proposals for the Fleet ServiceEmployees, Mechanics and Maintenance Training Specialistsrepresented by the International Association of Machinists andAerospace Workers. The IAM has elected to represent its owncurrent retirees as their "authorized representative" pursuant toSection 1114(c) of the Bankruptcy Code. Thus, the IAM retirees'interests are not represented by the Retiree Committee appointedby the United States Bankruptcy Court for Eastern the District ofVirginia.

The Debtors sought approximately $20,000,000 in annual costsavings, by reducing certain retiree benefits related mostly tohealth care. Thereafter, the Debtors frequently met with the IAMto reach a resolution. On January 5, 2005, the Debtors and theIAM reached mutually satisfactory modifications to the IAMcollective bargaining agreement, which are similar to themodifications agreed to by the Retiree Committee.

The Agreement substitutes the present medical and dental coverageprovided by the Debtors to current retirees with COBRA coverage.The COBRA rate will be 102% of the active population's book rate.The Health Coverage Tax Credit is expected to apply to most of thepre-65 retirees due to COBRA medical plan coverage and the receiptof benefits from a defined benefit plan administered and paid forby the Pension Benefit Guaranty Corporation. The HCTC will reducethe costs of COBRA coverage by 65% for many current retirees,providing a cushion to those most affected. To the extent thatcurrent retirees, their spouses, or their dependants do notqualify for COBRA and HCTC treatment, the Debtors will providepartial compensation for the increased cost of healthcarecoverage.

Under the Agreement, the Debtors will provide payments to currentretirees who cannot take advantage of COBRA or the HCTC. TheDebtors will supplement those who can participate, but only at anincreased cost. Both measures will reduce the adverse impact ofincreased healthcare costs on current retirees. These paymentswere not envisioned under the Debtors' 1114 Proposal. Under theAgreement, the Debtors will achieve less in Section 1114 costreductions, but the concession brings an important constituencyinto the growing consensus of stakeholders supporting thereorganization efforts.

Brian P. Leitch, Esq., at Arnold & Porter, in Denver, Colorado,tells Judge Mitchell that the Agreement reflects a compromiseresulting from good faith, extensive arm's-length negotiations.The negotiations involved trade-offs. The resulting Agreementaddresses the Debtors' financial and transformational imperativesin a manner that will best serve the Debtors, their bankruptcyestates' and the interests of the IAM's current retirees.

The cost reductions for the IAM retirees were not available underthe Section 1114 Proposal. For the Debtors, the Agreementrequires only a modest reduction in the Section 1114 costreductions and brings an important constituency into the growingconsensus of stakeholders supporting their reorganization efforts.Modification of the Debtors' cost structure is a critical aspectof the Debtors' Transformation Plan.

At the Debtors' request, Judge Mitchell approves the Agreement.

Headquartered in Arlington, Virginia, US Airways' primary businessactivity is the ownership of the common stock of:

Under a chapter 11 plan declared effective on March 31, 2003,USAir emerged from bankruptcy with the Retirement Systems ofAlabama taking a 40% equity stake in the deleveraged carrier inexchange for $240 million infusion of new capital.

VECTOR GROUP: SEC Declares Resale Registration Statement Effective------------------------------------------------------------------ The Securities and Exchange Commission has declared effectiveVector Group Ltd.'s (NYSE: VGR) registration statement on FormS-3. The registration statement relates to resales by the holdersof up to $81.875 million principal amount of Vector Group's 5%Variable Interest Senior Convertible Notes due 2011 and the commonstock issuable upon conversion of the notes.

The initial $65.5 million of notes and rights to purchase $16.375million of additional notes were originally sold on Nov. 18, 2004,in a private placement to qualified institutional buyers. Thefiling of this registration statement was required by theregistration rights agreement entered into by Vector Group inconnection with the sale of such notes and rights to purchase.

This press release shall not constitute an offer to sell or thesolicitation of an offer to buy nor shall there be any sale ofthese securities in any state in which such offer, solicitation orsale would be unlawful prior to registration or qualificationunder the securities laws of any such state.

A written prospectus meeting the requirements of Section 10 of theSecurities Act of 1933 may be obtained from:

VENTAS REALTY: Moody's Affirms Ba3 Senior Debt Rating-----------------------------------------------------Moody's Investors Service has affirmed its Ba3 senior unsecureddebt rating of Ventas Realty Limited Partnership, the operatingpartnership of Ventas, Inc. The outlook for Ventas' ratingsremains positive. According to Moody's, the rating affirmationreflects continued improvement in Ventas' fixed charge coverage,progress in diversifying its tenant base, and the improvement inoverall quality of the property portfolio displayed by healthyrent coverage.

The rating agency said that Ventas continues to strengthen itsfinancial profile. Fixed charge coverage for the first ninemonths of 2004 improved to 3.0x, from 2.3x for 2003. Debt/EBITDAwas 3.9x at 9/30/04, compared to 3.5x at 12/31/03 and 4.5x at12/31/02. The REIT's liquidity is good, earmarked by a $300million bank credit facility, of which $264 million is available,and modest near-term debt maturities. Ventas' floating-rate debtexposure is attenuated through swaps.

Moody's notes that Ventas' ratings continue to be constrained bythe REIT's very high exposure to a single tenant, KindredHealthcare, asset concentration (approximately 83% of trailingtwelve month REIT revenues and notably lower than 2003 at 95%) inskilled nursing facilities (SNFs) and long-term acute carehospitals (LTACs) and secured debt at 26% of undepreciated bookassets. The ratings also incorporate the firm's focus on highlyregulated health care segments, and the vulnerabilities theseassets have to shifts in government healthcare funding.

Although the REIT's continued efforts to reduce its tenantconcentration are encouraging, Moody's remains concerned about thefirm's potential earnings volatility due to its reliance on asingle operator to generate its earnings and operating in a highlyregulated industry subject to legislative shifts. Should Ventasneed to replace Kindred as the operator of its properties, theREIT may find it difficult to find replacement tenants in a timelymanner and at similar or higher rents. This could lead todisruptions in Ventas' cash flow and weakened performance. Moody'snotes, however, that Ventas' property portfolio consists of assetsthat are generally highly productive, which should enhance itsability to secure new operators.

Moody's stated that the positive rating outlook reflects thestrengthening fixed charge coverage and the expectation thatVentas will continue to make meaningful progress to diversify itsrevenue stream, and to reduce secured debt and overall leverage.The rating agency assumes that any growth -- which is necessary toaddress the Kindred concentration challenge -- will not come atthe expense of the REIT's balance sheet.

Material deterioration in Kindred's financial or operatingperformance, or an inability by Ventas to diversify its assetcomposition and tenant concentration, will result in at least achange in rating outlook to stable. A rating upgrade for Ventaswould depend on the ability of the REIT to reduce Kindred'sconcentration closer to 60% of revenues, increase its propertydiversity by reducing SNF and LTAC composition to below 75%,reduce secured debt to below 20% of undepreciated book assets, andmaintain laddered debt and low floating-rate exposure.

Most of these goals would need to be achieved to warrant anupgrade, with material progress on remaining ones. Continuedbuilding of Ventas management breadth is needed, too, as well asdecision-making and asset/tenant monitoring capacity, to securescalability of its business. Any further rating upgrades wouldnecessitate much more material progress in tenant diversificationin particular, which may be difficult without a large acquisition.

Vulcan Energy's upgrade follows our earlier upgrade of Plains All-American's senior ratings to Baa3 from Ba1, and moves Term LoanB's rating from the original three rating notches below PlainsAll-American's senior unsecured rating to the new two notchdifferential. Vulcan's ratings were assigned in March 2004 whilePlains All-American (then Ba1) was on review for upgrade toinvestment grade. Vulcan's ratings were assigned andsimultaneously placed on review for upgrade.

Plains All-American's upgrade reflected several years ofsubstantial value-adding growth, rising scale, regionaldiversification across many oil producing basins and operatingfunctions, adequately equity funded growth, and comparativelydurable cash flow. Furthermore, the MLP market has proceeded tomature to the point where it can more readily absorb the ever-larger new units offerings master limited partnership's such asPlains All-American need to pro-actively launch in order to fundacquisitions while remaining comfortably in the investment gradezone.

As a master limited partnership, it also must deliver onsignificant growth promises. This dependence on acquisitions forgrowth is only partly mitigated by Plains All-American's risingexposure to rising imported crude oil volumes, including itsCushing crude oil storage assets, its Canadian pipeline assets,and its new part ownership in the Capline.

Second, Plains All-American runs a very large crude oil marketingbusiness that opportunistically conducts hedged trading to capturecrude oil regional or quality basis differentials, opportunitieswhen the forward curve changes shape, or when it moves frombackwardation to contango. That business is fairly opaque andmust be conducted under tight risk management policies andprocedures.

Third, as a master limited partnership, Plains All-American mustpay out all free cash flow, well in excess of net income, to itsequity unit holders after interest expense and maintenance capitalspending. If that outflow is not offset periodically with newunits offerings, not only is organic credit accretion notpossible, but leverage would rise automatically.

Term Loan B partially funded Vulcan Energy's $456 millionacquisition of Plains Resources, Inc., on July 23, 2004 ($411million for Plain Resources equity, $30 million for its debt, and$15 million for transaction costs). The balance was funded by a$75 million 5-year senior unsecured loan guaranteed by Paul G.Allen, a bit over $200 million of cash common equity from VulcanCapital, and $25 million of rollover equity from previous PlainResources top management. Key Plain Resources assets of valuewere its 44% interest in Plains All-American's general partner andthe Plains All-American limited partner units.

Though Vulcan Energy's small medium sour crude oil reserves andproduction segment is currently cash flow positive duringhistorically high prices, we would expect it to turn flat tonegative at more moderate but still historically high oil prices.Furthermore, Vulcan Energy's production is in decline and facesadditional future plugging, abandonment, and environmentalliabilities.

The reduction from the original three-notch differential to thecurrent two notches between the Plains All-American and VulcanEnergy ratings reflects:

ii) that material Vulcan Energy debt reduction has begun and that a cash sweep is progressively reducing Vulcan Energy debt;

(iii) that TLB is secured by common limited partner units rather than subordinated limited partner units; and

(iv) that Vulcan Energy and its board members together have sufficient general partner interests to have considerable influence on PAA cash distribution policy.

The need for notching between the Plains All-American and VulcanEnergy ratings is driven by several factors. Term Loan B isstructurally subordinated to all debt and other liabilities atPlains All-American. Plains All-American can reduce cashdistributions if faced with reduced cash flow, cutting VEC cashflow and hurting Term Loan B collateral values. Term Loan B isalso exposed to repeated Plains All-American acquisition event andreleveraging risk and Plains All-American performance volatilitycould arise from its very large low margin crude oil marketing andtrading business.

Once Vulcan Energy meets the stipulated Term Loan B debt servicecoverage tests, the Paul Allen guaranteed $75 million loan can berefinanced pari-passu with Term Loan B and/or Term Loan B 's cashsweep proceeds can be allocated fully to prepay the $75 millionloan rather than Term Loan B. Roughly $10 million of Term Loan Bhas been repaid since initial drawdown.

It is possible that the Term Loan B cash flow coverage test(4.75:1) will be met sometime this year. If that occurs and issustained, Vulcan Energy would then need only to make minimum 50%TLB annual debt repayments. At 4.25:1 coverage, the cash flowsweep falls to zero. Thus, depending on how much of Term Loan B ispaid off this year before the cash sweep switches to repay the $75million loan, a Term Loan B bullet in the range of $100 million to$130 million could remain at Term Loan B maturity.

Plains All-American's midstream activities move roughly 2.5million to 2.6 million barrels of crude oil per day at an averageEBITDA margin approximating $0.28/barrel to $0.30/barrel. Aminority of that volume is driven by the natural flow of regionalcrude oil volume from producing regions to consuming region.Volumes are split between: general pipeline tariff throughput;All-American Pipeline in California; crude oil gathering;opportunistic and crude oil bulk purchases; crude oil terminalthroughput; and third party storage volumes.

Core to the Plains All-American and Vulcan Energy upgrades isMoody's assumption that Plains All-American will continue topursue the equity funding strategy for acquisitions it hascommunicated to Moody's and to the markets. MLP's do not tend toorganically credit accrete since they are required to essentiallydistribute all free cash flow after interest expense andmaintenance capital to their unit holders.

It is therefore important to the ratings that Plains All-American's growth and funding objectives not be overly aggressiveand that acquisitions and growth capital spending continue to beat least roughly 50% funded by new equity issuance. It is alsoimportant to the ratings that Plains All-American's riskmanagement policies and practices continue protect it frommaterial hedging losses.

Plains All-American has built an increasingly integrated, large,geographically diversified, profitable business of midstream crudeoil assets and services. It has done this with a patient seriesof amply equity-funded acquisitions of mid-stream assets,subsequent integration, and a modest degree of organic growth.Its hard asset portfolio consists of crude oil gathering,pipeline, storage, and terminaling assets that move crude oil fromthe producing regions along the Gulf Coast, the Southwest, Mid-continent, West and East Texas, California, and Canada to keyrefining centers along the Gulf Coast and in the Rocky Mountains,Midwest, and California.

Plains All-American has boosted its proportion of fee-based versustrading and marketing cash flow and has reduced the proportionalimpact on cash flow of declining Point Arguello and Santa Ynezoffshore California production, with resulting throughput declinethrough its All-American Pipeline. PAA has also boosted its Basinpipeline volumes, captured by its planned shutdown of its Rancholine when it acquired Basin.

While the All-American Pipeline, which is in secular decline,remains Plains All-American 's second most profitable asset, andby far its highest margin significant asset, it now generates lessthan 20% of EBITDA. Furthermore, now-unaffiliated PlainsExploration & Production's success in finally winning drillingpermits for offshore California, and its initial Rocky Pointsuccess, may slow All-American throughput decline.

WEIRTON STEEL: Inks Pact to Settle Shiloh Landfill Issues---------------------------------------------------------Pursuant to Rule 9019 of the Federal Rules of BankruptcyProcedure, the Weirton Steel Corporation Liquidating Trustee asksthe U.S. Bankruptcy Court for the Northern District of WestVirginia to approve a compromise and settlement reached amongthe Weirton Steel Corporation Liquidating Trust, the WestVirginia Department of Environmental Protection and Shiloh RiverCorporation.

Mark E. Freedlander, Esq., at McGuireWoods, LLP, in Pittsburgh,Pennsylvania, relates that prior to Petition Date, Weirtondisposed of certain non-hazardous waste materials from itsoperations at an off-site location known as the Shiloh Landfill,which is owned by Shiloh and operated by Shiloh and Weirton.

On September 29, 1997, Weirton, Shiloh and the West Virginia DEPentered into a Consent Order and Agreement to address thetreatment of the Shiloh Landfill with the West VirginiaEnvironmental Quality Board. In 1999, Weirton and Shiloh closedthe Shiloh Landfill. On April 15, 1999, the West Virginia DEPissued Solid Waste/NPDES Permit No. WV 0079081, and Shiloh andWeirton became co-permittees for the Shiloh Landfill.

Shiloh and the West Virginia DEP objected to the sale ofWeirton's assets to International Steel Group. They allege thatthe ISG Sale and the Sale Order would permit Weirton to dischargeits otherwise non-dischargeable environmental obligations andresponsibilities relating to the Shiloh Landfill. The WestVirginia DEP filed an appeal of the ISG Sale Order in the UnitedStates District Court for the Northern District of West Virginia.

On April 15, 2004, the Permit for the Shiloh Landfill was aboutto expire by its term. The West Virginia DEP issuedAdministrative Order No. 5565, which extended the Permit andrequired Weirton, as co-permittee with Shiloh, to file anapplication to reissue the Permit to the West Virginia QualityBoard. Weirton appealed the Administrative Order.

After the Closing of the ISG Sale and pending the outcome of theSale Appeal and the Board Appeal, Weirton is funding amountsminimally necessary to maintain the environmental status quo atthe Shiloh Landfill in accordance with a May 24, 2004, Orderentered by the Quality Board authorizing Weirton, Shiloh and theWest Virginia DEP to intervene, and granting stay.

The West Virginia DEP filed Administrative Priority Claim No.20406 for $299,750 in Weirton's case, which included:

-- a claim for $187,500 in postpetition civil penalties;

-- a contingent amount of $60,000 to $70,000 per year in injunctive relief for the 30-year post-closure period related to the Shiloh Landfill pending the outcome of the Sale Appeal; and

The West Virginia also filed Claim No. 2742 in a contingent andunliquidated amount. Shiloh did not file a proof of claim inWeirton's bankruptcy proceedings.

The West Virginia DEP alleges, in addition to the claims itasserts against Weirton, that certain individuals formerlyemployed by Weirton and the current authorized agent of Weirtonmay have personal liability to the Department under certaincircumstances.

The Weirton Trustee does not agree with the West Virginia DEP'sassertion. The Weirton Trustee disputes the amount, validity andpriority of the claims the West Virginia DEP assert.

The Liquidating Trust, the West Virginia DEP and Shiloh want toresolve the Claims and the Appeal Dispute, without any admissionof liability, to avoid the costs, risks, delay and uncertaintyassociated with litigation and claims disputes.

The primary terms of the parties' Settlement Agreement are:

(a) In full and final payment and satisfaction of all West Virginia DEP claims related to the Shiloh Landfill, Weirton will pay the Department $250,000 as an allowed administrative priority claim. The amount will be placed in an interest bearing trust by the West Virginia DEP and will be used with respect to the regulatory compliance, maintenance and reclamation of the Shiloh Landfill;

(b) In full payment and satisfaction of all claims of the West Virginia DEP may have or have had in Weirton's case, except as not otherwise waived or released in the Compromise and Settlement, and specifically, in full payment and satisfaction of those postpetition stipulated penalty claims related to the Consent Decree in Civil Action 5:96-CV-171, the Weirton Trust will pay the West Virginia DEP $65,000 as an allowed administrative priority claim. Notwithstanding the ultimate status of the administrative solvency of the Weirton bankruptcy estate, no portion of the Settlement Amounts will be subject to recovery or disgorgement once paid;

(c) Upon payment of the Settlement Amounts, any and all claims against Weirton or the Weirton Trustee that the West Virginia DEP has filed or could file in the future will be disallowed and expunged;

(d) The West Virginia DEP will take all necessary action to dismiss the Sale Appeal, with each party bearing its own costs;

(e) Prior to the execution of the Compromise and Settlement, the parties entered into a Consent Judgment, which dismissed the Board Appeal, with each party to bear its own costs;

(f) Neither the West Virginia DEP nor Shiloh will seek other or further payment from the Weirton Trustee for any claim of any kind or nature arising from or relating to the Shiloh River Landfill, except for any liabilities arising from the illegal disposal of waste by Weirton at the Shiloh River Landfill;

(g) The West Virginia DEP will forever release and discharge Weirton from and all claims arising from the illegal disposal of waste by Weirton at the Shiloh River Landfill;

(h) Shiloh, its successors and assigns, will forever release and discharge Weirton from any and all claims relating in any way to matters involving the Shiloh River Landfill, excepting any liabilities arising from the illegal disposal of waste by Weirton at the Shiloh River Landfill; and

(i) The Weirton Trustee will forever release and waive any and all claims of Weirton or the Weirton Trustee against the West Virginia DEP or Shiloh related to the Shiloh Landfill.

Mr. Freedlander points out that without the settlement, theparties' dispute could:

-- substantially delay the distribution process;

-- increase costs associated with litigating the Claims and Appeal Dispute; and

-- result in a substantial dilution of the distributions to creditors holding allowed claims, if the West Virginia DEP or Shiloh were to prevail.

WORLDCOM INC: Bondholders Suit Against Underwriters Going to Trial-----------------------------------------------------------------Following fact discovery, the Lead Plaintiffs in a consolidatedsecurities class action arising from the collapse of WorldCom,Inc., asked the U.S. District Court for the Southern District ofNew York to find that certain of WorldCom's financialsincorporated in the 2000 and 2001 registration statements for twoWorldCom bond offerings contained material misstatements.

The allegedly false statements on which the Lead Plaintiffs'request is based relate to the reporting of WorldCom's line costs,capital expenditures, depreciation and amortization, assets, andgoodwill.

The Lead Plaintiffs allege that the investment banks thatunderwrote the 2000 and 2001 Offerings violated Sections 11 and12(a)(2) of the Securities Act of 1933, 15 U.S.C. Sections 77k and77l.

The Plaintiffs assert that the Underwriters did almost noinvestigation of WorldCom in connection with their underwriting ofthe bond offerings for the company, and because they didessentially no investigation, will be unable to succeed with theirdefense that they were diligent. The Lead Plaintiff argue thatthere were "red flags" that should have led the Underwriters toquestion even the audited financials filed by WorldCom.

The Lead Plaintiffs in the Securities Litigation are:

-- HGK Asset Management;

-- Alan G. Hevesi, Comptroller of the State of New York, as Administrative Head of the New York State and Local Retirement Systems and as Trustee of the New York State Common Retirement Fund; and

-- New York State Common Retirement Fund.

For their part, the Underwriter Defendants moved for summaryjudgment on the Sections 11 and 12(a)(2) claims. TheUnderwriters sought a declaration that they have no liability forany false statements in the WorldCom financials that accompaniedthe registration statements or for the alleged omissions fromthose registration statements.

The Underwriter Defendants allege that WorldCom managementconcealed the fraud from almost everyone within WorldCom, fromWorldCom's outside auditor, and from the Underwriters themselves.The Underwriters assert that they were entitled to rely onWorldCom's audited financial statements as accurately describingthe company's financial condition, and also on the comfort lettersthat WorldCom's outside auditor provided for the unauditedfinancial statements.

The Underwriter Defendants also argue that their due diligenceefforts should not be measured solely by the work that theyundertook in connection with the bond offerings themselves, butshould be assessed against a background of their long termfamiliarity and work with the company. The Underwriters point outthat much of the information that was allegedly omitted from thebond registration statements was already known to the public.

The Underwriter Defendants believe that they are entitled tofurther discovery of the Lead Plaintiffs' experts and thewitnesses in Bernard Ebbers' criminal trial. The Underwriterscontend that the witness will agree that no amount of duediligence would have uncovered the accounting fraud.

In a 159-page Opinion and Order dated December 15, 2004, DistrictCourt Judge Denise Cote notes that it is undisputed that at leastas of early 2001, WorldCom executives engaged in a secretivescheme to manipulate WorldCom's public filings concerningWorldCom's financial condition. The District Court finds nodisputed issue of material fact regarding the falsity ofWorldCom's first quarter financial statement for 2001 insofar asit reported WorldCom's line costs or the materiality of theallegedly false statement to investors purchasing notes in the2001 offering.

Accordingly, Judge Cote rules that the Lead Plaintiffs areentitled to summary judgment on the issue of whether theRegistration Statement for the 2001 Offering was false andmisleading. The Lead Plaintiff's request for summary judgment onthe 2000 Offering and on any other purported false statement madein connection with the 2001 Offering is denied.

Judge Cote holds that, because those public filings wereincorporated into the registration statements for the two bondofferings, the Underwriters are liable for those false statementsunless they can show that they were sufficiently diligent in theirinvestigation of WorldCom in connection with the bond offerings.

Judge Cote explains that underwriters can rely on an accountant'saudit opinion incorporated into a registration statement inpresenting a defense under Section 11(b)(3)(C) of the SecuritiesAct. Underwriters may not rely on an accountant's comfort lettersfor interim financial statements in presenting such a defense.Comfort letters do not "expertise any portion of the registrationstatement that is otherwise non-expertised," Judge Cote says,citing William F. Alderman, Potential Liabilities in InitialPublic Offerings, in How To Prepare an Initial Public Offering2004 405-06 (2004).

Judge Cote also points out that the Committee on FederalRegulation of Securities in its Report of Task Force on Sellers'Due Diligence and Similar Defenses Under the Federal SecuritiesLaws, 48 Bus. Law. 1185, 1210 (1993), held that underwriters"remain responsible" for unaudited interim financial informationas in the case of other non-expertised information.

Judge Cote holds that underwriters perform a different functionfrom auditors. They have special access to information about anissuer at a critical time in the issuer's corporate life, at atime it is seeking to raise capital. The public relies on theunderwriter to obtain and verify relevant information and thenmake sure that essential facts are disclosed.

"Underwriters should ask those questions and seek those answersthat are appropriate in the circumstances. They are not beingasked to duplicate the work of auditors, but to conduct areasonable investigation," Judge Cote says.

Headquartered in Clinton, Mississippi, WorldCom, Inc., now knownas MCI -- http://www.worldcom.com/-- is a pre-eminent global communications provider, operating in more than 65 countries andmaintaining one of the most expansive IP networks in the world.The Company filed for chapter 11 protection on July 21, 2002(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, theDebtors listed $103,803,000,000 in assets and $45,897,000,000 indebts. The Bankruptcy Court confirmed WorldCom's Plan on October31, 2003, and on April 20, 2004, the company formally emerged fromU.S. Chapter 11 protection as MCI, Inc. (Worldcom Bankruptcy News,Issue No. 69; Bankruptcy Creditors' Service, Inc., 215/945-7000)

* King & Spalding Increases New York Office Space by 30 Percent---------------------------------------------------------------King & Spalding LLP, a leading international law firm, reports theexpansion of its midtown Manhattan office with the leasing of twoadditional floors at its location at 1185 Avenue of the Americasand the extension of its lease to the year 2025. Michael O'Brien,managing partner of the firm's New York office, said King &Spalding's strength in the region continues to grow, especially inthe areas of securities litigation, mergers and acquisitions andintellectual property litigation. The expansion will allow thefirm to handle increasing client demand here.

"Our rapid growth in this office-especially in the past two years-means that our 185 lawyers and 175 staff are currently workingnearly shoulder-to- shoulder," O'Brien said. "The new space willallow us not only to spread out, but also to continue to grow tomeet client demand. Importantly, it will ensure our continuedstrong presence in this major money center and permit us toprovide superior service to our clients without disruption."

The New York office of King & Spalding was opened in 1990 with 3lawyers. In the past four years, the office has doubled in size.An influx of 20 new lawyers last year in the intellectual propertypractice, as well as the arrival of new partners in M&A, financialtransactions and private equity, put a strain on the firm'sexisting 151,000 square feet of space.

King & Spalding occupies space on floors 30 through 35 of 1185Avenue of the Americas and is the building's largest tenant. Thefirm is taking over the 36th and 37th floors, for an additional52,000 square feet. Christopher B. Price, a partner in firm's NewYork Real Estate practice, negotiated the deal on behalf of King &Spalding.

The New York office of King & Spalding provides a wide range ofservices to clients the world over. Chief among its practices arethose specializing in business litigation, corporate finance,energy, financial restructuring, private equity, mergers andacquisitions, tax and real estate. Its clients include numerousbanks and financial institutions and leading corporations, such asSprint Corporation, Lehman Brothers, The Coca-Cola Company andCredit Suisse First Boston LLC. Earlier this month, King &Spalding represented Sprint Corporation in its $35 billion mergerwith Nextel Corporation.

About King & Spalding LLP

King & Spalding LLP -- http://www.kslaw.com/-- is an international law firm with more than 800 lawyers in Atlanta,Houston, London, New York and Washington, D.C. The firmrepresents more than half of the Fortune 100, and in a CorporateCounsel survey in October 2004 was ranked one of the top ten firmsrepresenting Fortune 250 companies overall.

* Sandler O'Neill Names Six New Principals------------------------------------------Sandler O'Neill & Partners, L.P., a full-service investmentbanking firm specializing in financial services companies, hadnamed six individuals to Principal. The new Principals includesenior professionals in investment banking, equity research andcapital markets, and were selected based on their significantcontributions to the firm and commitment to its continued growthand success.

The recently named Principals are:

-- Mary Anne Callahan. Ms. Callahan joined the firm's New York office as a Managing Director in the Investment Banking Group in October 2002. She advises clients on a wide variety of investment banking issues with a special focus on community banks.

-- Peter Finnerty. Mr. Finnerty joined the firm's Atlanta office as a Managing Director in the Investment Banking Group in June 2002. He specializes in advising banks, thrifts and other financial institutions on mergers, acquisitions, financing alternatives and other strategic matters.

-- Richard Repetto. Mr. Repetto joined the firm's New York office as an Associate Director in the Equity Research Group in November 2003. He covers companies in the eBrokerage, Execution Services and eSpecialty Finance sectors.

-- Alan Roth. Mr. Roth joined the firm's New York office as a trader in October, 2001. He has more than 15 years experience in the mortgage-backed securities business, primarily trading whole loans and agency collateralized mortgage obligations (CMO's).

-- John Sparacio. Mr. Sparacio joined the firm's New York office as a Vice President in the Accounting Group in April 1996. He was promoted to Associate Director in 1998 and Managing Director in 2000. He oversees the preparation of the firm's financial statements and its regulatory reporting requirements.

-- Ed Stein. Mr. Stein joined the firm's New York office as an Associate in the Fixed Income Group in October 1992. He was promoted to Associate Director in 1995 and Managing Director in 1997. He works with commercial banks and thrift clients advising on asset liability management, strategic business planning and balance sheet restructuring.

"It is with great enthusiasm that I announce the promotions ofthese six outstanding professionals," said Jimmy Dunne, SeniorManaging Principal. "Their commitment to ensuring excellentclient service and their performance in their specific areas ofexpertise have been and will continue to be invaluable assets toSandler O'Neill."

Monday's edition of the TCR delivers a list of indicative pricesfor bond issues that reportedly trade well below par. Prices areobtained by TCR editors from a variety of outside sources duringthe prior week we think are reliable. Those sources may not,however, be complete or accurate. The Monday Bond Pricing tableis compiled on the Friday prior to publication. Prices reportedare not intended to reflect actual trades. Prices for actualtrades are probably different. Our objective is to shareinformation, not make markets in publicly traded securities.Nothing in the TCR constitutes an offer or solicitation to buy orsell any security of any kind. It is likely that some entityaffiliated with a TCR editor holds some position in the issuers'public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies withinsolvent balance sheets whose shares trade higher than $3 pershare in public markets. At first glance, this list may look likethe definitive compilation of stocks that are ideal to sell short.Don't be fooled. Assets, for example, reported at historical costnet of depreciation may understate the true value of a firm'sassets. A company may establish reserves on its balance sheet forliabilities that may never materialize. The prices at whichequity securities trade in public market are determined by morethan a balance sheet solvency test.

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Monthly Operating Reports are summarized in every Saturday editionof the TCR.

For copies of court documents filed in the District of Delaware,please contact Vito at Parcels, Inc., at 302-658-9911. Forbankruptcy documents filed in cases pending outside the Districtof Delaware, contact Ken Troubh at Nationwide Research &Consulting at 207/791-2852.

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